Today, we are going to share real estate NRIs investment tips. Buying a house is one of the biggest dreams of any Indian. A home is where the heart lies. So, whether it is the residence of our country or Indians residing abroad(NRI), a home is the most beautiful thing. It is our happiness and security at the same time. Given the option, most of the Indians would like to have a home of their own.
It is due to such sentiments and also the current market situation of depreciating rupee and stagnant property price, the demand for property from the NRIs is increasing. “They either plan to come back at some point in time or have relatives to use the facility”, says Rajesh Saluja, chief executive officer, ASK Wealth Advisors Pvt. Ltd.
Smart Investment Tips For NRIs
The investment in property by the NRIs is governed by Reserve Bank of India (RBI) through Foreign Exchange Management Act (FEMA). According to FEMA, an NRI is the citizen of India who is residing abroad. The NRI need not take any approval before investing in property. However, there are basic rules and guidelines to be followed.
There is no limit for the NRI to buy commercial or residential property. The investment cannot be made in agricultural land, plantation property, and farmland. But for the property falling into these categories, NRI can inherit them or continue to hold if already inherited. They can have the property in joint name with an NRI but not with an Indian citizen.
They will have to provide documents such as a copy of passport, photographs, a copy of PAN card, bank details and proof of address if it differs from what is mentioned in the passport.
It is very easy for the NRIs to avail loans from the banks or any other financial organization from their overseas branch. The payment can be made through NRE, NRO or FCNR account. The loan amount and the interest need to be paid back using the same channel. They can also sell their property to an Indian citizen, NRI and person of Indian origin residing abroad.
The repatriation of the proceeds has certain restrictions. They can repatriate up to one million annually if the investment has been made using NRO account but the whole amount is permissible if NRE or FCNR account is used.
The limitation is also same for the profit realized. Only one million can be repatriated annually and the rest amount needs to be in the NRO account or reinvested back in India. NRI can only repatriate sale proceeds from the sale of two properties in their lifetime with the cap of one million annually.
The amount resulting from property transaction is taxable if he is residing in the country where worldwide income is taxable unless the country has double tax avoidance agreement with India. The interest on the home loan is tax deductible without any upper limit.
If the NRI owns more than one property, income tax is liable. If the property is not on rent or inherited, the income tax is paid on deemed rent or income. When making an investment, the NRI should use proper channel, friends or relatives to ensure the authenticity of the property.To know more visit www.propknack.com