India’s Real Estate Sector has always been an attractive investment option, especially for the Non Residents of India. The purpose for the same may be several, some may want to invest for their parents, future, or just simply own a second home. In either case, we are well aware of the fact that there is a huge potential in the sector. The real estate market has always attracted several Indians living abroad to come and invest in properties.
Whether a Commercial project or Residential, many builders aim to attract international customers by offering a variety of options to choose from. Moreover, with the current scenario and low-interest rates on loans, now is the perfect time to invest in properties and get a deal of a lifetime. There are certain Rules and Regulations that a Non-Resident Indian must follow and know before investing, selling, or leasing a property in India. That is why, before you invest, let us look at a few things you need to consider.
According to Indian Law, an NRI is allowed to buy both residential as well as commercial property. The sky’s the limit, nobody will restrict you in terms of the number and or size of the property you can possess. However, you must know that in India, an NRI is not allowed to buy Agricultural land, farmhouse, etc. They are allowed to take possession of the property only if the legal rights are transferred by the parents or gifted to them.
1. Tax
If a Non-Resident of India owns a property in the country, then he/she is liable to pay tax. The calculation of the tax will be done the same way as it is done for an Indian citizen. However, section 80c allows NRIs to demand a deduction for head reimbursement, stamp duty as well as the registration fee that was charged while purchasing a property.
2. Payment
Payment to the property seller can be easily made through any normal channels like cheque from NRE/ FCNR or NRO account (Non Resident External or Foreign Currency Non-Repatriable or Non Resident Ordinary), cash, or cheque from bank in case if you availed home loan to buy a property.
3. Builder
Before investing in any property you must be aware of the builder and his past projects. This will help you decide whether his projects are worth investing in or not. You must strictly check all the factors such as brand recognition, quality of the apartments, track record, etc. It is also advised that you physically go and check the amenities of the project if specified.
4. RERA Status
This is a must-have for all, be it an Indian citizen or a Non-resident Indian. Today each project in India has a RERA number and hence, you need to ask whether the project is RERA registered, as this will tell you if the property is legal or not.
5. Documents Required
Keep your important documents handy as you will need to go through standard government documentation process. The following documents are required for an NRI or a PIO or OCI to buy a property in India. :
- Address Proof
- PIO or OCI Card (for PIO and OCI)
- Passport (for an NRI)
- PAN Card (Permanent Account Number)
- Passport Size Photographs
6. Get a Lawyer
Especially for all your legal advice and financial matters it is always better to get a lawyer you can help smoothen all the legal formalities. No matter how careful you may be, there are always certain loopholes that can bring you down. A lawyer will help you with all the legal process and paperwork that is required to close the deal. Be well acquainted with Indian Laws.
NRI who are planning to invest in India must know the laws that govern the real estate transactions. You need to know whether whatever profit you earn from the invest you have made are subject to double taxation or not.
