Buying Property in India can frequently leave non-resident Indians confused about how to proceed with their plans. They need clarity on the guidelines and procedures for making investments, and as a result, they have apprehensions regarding the returns that may be expected from such investments. This article addresses some of the most critical concerns that prospective non-resident Indian investors may have concerning conducting business in Indian real estate and makes an effort to put such matters to rest.
Type of Properties an NRI can buy
Other than agricultural land, farmhouses, and plantation property, non-resident Indians are eligible to buy immovable properties in India. For properties such as agricultural land, plantation property, or farmhouse, one must obtain permission from the Reserve Bank of India (RBI) and the government in india.
Financial Planning
Non-resident Indians who are holders of non-resident external (NRE) or non-resident ordinary (NRO) rupee accounts in India can purchase real estate in the country by writing checks drawn on their accounts. Foreign Currency Non-Resident (FCNR) accounts can also use the money in their budgets to make purchases. In addition, foreign currency from other countries can be transported into India through legal banking.
Loans and payment method
NRIs can take home loans from Indian financial institutions for buying Property in India. You can also take out a loan for house improvements and repairs.
You have the option of paying the monthly instalments in any one of the following ways:
- You can transfer the money from your overseas bank account to your domestic account through the conventional banking system.
- Use post-dated checks or the Electronic Clearance Service (ECS), which can be issued from your NRE, NRO, or FCNR account.
- Using funds derived from the rent that is collected by this property
- Cheques that have been drawn from the bank account of a local relative of yours
Tax Benefits
The amount of TDS, or Tax Deducted at Source, that must be withheld from the purchase price of immovable property in India by a non-resident Indian who is a non-tax resident of India is determined by the residential status of the person selling the property as well as the nature of the capital gains that have been accumulated.
- While purchasing immovable property in India from a resident, a non-resident Indian (NRI) must make a TDS deduction of 1% if the sale consideration value is more than Rs 50 lakh.
- If, on the other hand, a non-resident Indian (NRI) purchases a property from a foreign national (NRM), and if long-term capital gains (LTCG) are relevant, then the TDS deduction ought to be set at 20%.
Also Read: How to Avoid GST on Flat Purchases
Best City to Buy Property in India
When determining the overall value of a piece of real estate, the city in which it is situated and its location are also crucial factors. Regarding real estate investment, a city’s connectivity, climate, and infrastructure are the three most important factors. Because of the general social and corporate infrastructure that exists in cities like Ahmedabad, Mumbai, Gurugram, and Pune, non-resident Indian investments in real estate are likely to yield the highest returns in these areas. Because there are so many work prospects in these locations, the income from a rental property is thriving.
Power of Attorney (POA)
It is common for non-resident Indians to be unwilling to travel to India to register a property in their name there. If they find themselves in such a predicament, they are well within their rights to grant power of attorney to a relative in India. After that, the relative can sign the purchase contract on their behalf and register the item in their name. The NRI must sign the power of attorney document itself in the presence of a notary public or a consular officer in the nation where he resides.
Once the POA has been delivered to India, the person assigned a power of attorney will have three months from the day the power was given to sign and adjudicate the document at the office of the registrar in India. When all of these steps have been finished, we can confidently say that the POA has been lawfully granted.
Choosing a reputed builder
When buying property in India as a non-resident Indian (NRI), it is essential to select a builder that has a solid reputation and can be relied on. It is the most critical item that non-resident Indians living outside India should consider when investing in the Indian real estate market. It contributes to the prevention of subsequent bad events. It might be easier for non-resident Indians (NRIs) to work with reputed and ethical builders Manglam Radiance is the best option for you, With most or all of the required certificates and clearances.
Conclusion
Knowledge is the foundation of a sound decision. The information that was presented above can assist you in gaining a better grasp of NRI property dealings, which in turn will assist you in arriving at the appropriate decision regarding the property.
FAQs
Is buying property in India a good investment?
If investors have money left over after making investments, they would buy land rather than put it in a fixed deposit, offering low returns. In addition, the increasing amount of money being invested in the real estate market is another factor that bolsters investors’ expectations of healthy price growth.
What is the process of buying property in India?
The buying procedure is divided into eight distinct parts by our company. In the following order:
- Introduction
- Document verification
- drafting and carrying out the sale agreement
- TDS on mortgage loans
- Duties on stamps and fees for registering vehicles
- writing and carrying out sale deed transactions
- After-sale deed registration
Can a foreigner buy a property in India?
It is not possible for foreign nationals who are currently living outside of India to purchase real estate in India. The Reserve Bank of India does not need to consent for a foreign citizen residing in India to buy real estate in India; nonetheless, the foreign citizen must check once to see if they need any authorisation before purchasing a residence in India. Residents of India from Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan who wish to buy immovable property in India must first obtain special permission from the Reserve Bank of India (RBI) and the government of India. This permission is required to buy property in India.
Can I buy property in India with OCI?
Residential and commercial property in India is available for purchase to OCI cardholders. However, they are not permitted to purchase agricultural land of any type, which includes farmland as well as plantation property of any kind.
How many properties can you own in India?
According to the law currently in effect in India, there is no precise limit on the number of apartments and houses a person or a couple can own. It applies to both urban and rural areas. However, the number of properties a person can purchase may be subject to numerous legal and financial ramifications, such as taxation, stamp duty, and registration costs. These expenses might limit the number of properties a person can purchase.
Which city is the most expensive to buy a house in India?
Mumbai is, without a doubt, the most expensive city in India, even though it is also known as the “city of dreams” in India and the “financial capital” of India.
