5 things NRI should know while buying property in India

5 things NRI should know while buying property in India

Planning to buy a property in India. What if a builder from India visit you in Qatar and take you through the project.

Meet the Bengaluru Builders in Qatar – Click here to Leave your details and we will send you an invite when they visit Qatar.

Price correction in the Real Estate sector in the recent past and favorable currency rates for NRI’s makes it the right time to buy a property in India.

1. Type of Property NRI can buy:

NRI can buy all sorts of properties in India except agricultural land, farmhouse, and plantation property. There is no limitation for NRI / Person of Indian Origin (PIO) to buy properties in India. In case of intention to buy such property NRI’s have to get approval from the Indian government and RBI.

2. Tax for NRI while buying property in India:

NRI can enjoy most of the tax benefits which an Indian resident is entitled while purchasing property in India. NRIs can claim a deduction of INR 100,000 under section 80 C on the Income Tax Act, 1961. While selling property in India, TDS (tax deducted at source) is calculated

• 6% on long-term capital gains
• 9% on short-term capital gains (if you sell within three years of purchase)

(If you have a lower tax slab applicable for any reason, you can apply for a refund of the TDS by filing an income tax return)

3. Ownership of NRI Property:

An NRI can buy property in their own name or jointly with any other NRI. The property cannot be in joint ownership with a resident Indian or with those who are otherwise not allowed to buy property in India.

Power of attorney (PoA) for Buying property in India:

NRI’s can buy a property in India without even visiting India by means of PoA. NRI’s can opt to give a Power of attorney (PoA) to complete the property purchase process in India. PoA can be given to their family members or friends to manage the whole buying process on behalf of him. The PoA can be general or can give specific rights to them to execute the property purchase or selling process.

4. NRI Home Loan to buy a property in India:

Like any Indian resident, NRI’s can avail a loan in Indian banks and finance houses to buy a property in India. The loan will be availed in Indian currency. Repaid in Indian currency using funds in NRO / NRE accounts (or foreign currency (FCNR) deposits for NRIs)

There are many NRI home loan schemes available from Banks and Home loan institutions in India. You can complete the whole home loan process without visiting India. Make sure you have a minimum of 20% of the property value to invest from your sources. A bank loan can be availed for the balance of 80% of the property value.

 5. Repatriation of funds (Bring the funds back to the foreign country)

The money you obtain by selling your property in Indian can also be brought back to the country you live in. The repatriation of funds can be done by following certain guidelines below:

• NRI should have purchased the property in accordance with the Foreign Exchange management Act directives, applicable at the time of purchase.
• The repatriated amount should be equal to or less than the amount paid to buy the property through if the property was acquired in foreign exchange remitted through normal banking channels or out of funds held in an FCNR (B) account.

However, in the following circumstances, the NRI/PIO may repatriate a maximum of $ 1 million per financial year:

• Out of the balance held in the NRO account, if the property was purchased out of rupee source of funds.
• If the property was acquired by way of gift, sale proceeds must be credited to an NRO account and may be repatriated thereafter.
• If the property was inherited from a resident Indian, funds may be repatriated on producing a piece of documentary evidence proving inheritance, an undertaking by the NRI/PIO, and also a certificate of an authorised chartered accountant in the formats prescribed by the Central Board of Direct Taxes (CBDT).
• In the case of a residential property, repatriation of sale proceeds is restricted to less than or equal to two properties.
• A foreign national may repatriate sale proceeds even if the property was inherited from a person outside India. However, prior approval of the RBI must be obtained.

Apart from the above-mentioned points, an NRI is given the same treatment as applicable to any other Indian resident.

Also Read:

Tenancy contract for company provided accommodation – Family Resident Visa in Qatar