NRIs or Non-Residential Indians are those who have migrated to a foreign country for better opportunities in education, employment, and business and still hold an Indian passport. They may be well settled abroad and earning big but at the end of the day, they are Indian by heart and want to come back to their country at some point in their life. This is the reason why many of them look for opportunities to hold some property here by investing in the real estate sector. But this is not the only reason; investment in the Indian real estate market also gives them better returns than western countries.
NRI investment in India falls under the purview of the Foreign Exchange Management Act (FEMA) regulated by the Reserve Bank of India (RBI). If you are an NRI and want to invest in the Indian real estate sector, you should be aware of all the provisions, regulations, documents required, payment methods, and important FEMA rules before start making an investment in the sector. Some of the most important points that NRIs should know when they are planning to invest in real estate in India:
- Types of Properties that an NRI can buy: A NRI can invest in both commercial and residential properties in India without any specific permission from RBI. There is no restriction on the number of commercial or residential properties than an NRI can purchase and acquire at his name. However, an NRI can’t buy any agriculture land farm house and plantation property, he can only own them if it is inherited or gifted to him.
- Transaction process: A NRI can make all the payments and transactions to purchase a property in India only through the proper banking channels or direct bank transfer. A payment cannot be done in the form of a traveler’s cheques or foreign currency. An NRI is also allowed to take a home loan in Indian rupees to finance the purchase of properties in the country. Also, the repayment of the loan amount should be paid in Indian rupees only.
- Ownership of the property: An Indian resident can’t be a joint owner of the property purchased by an NRI. An NRI can purchase a property either in a single name or jointly with any other NRI.
- Tax Benefits: Tax benefits to an NRI on purchasing properties in India are pretty similar to the benefits offered to any resident of India. AN NRI can also claim tax benefits under Section 80C to 80TTA on taxes paid by him in India on income from immovable property.
- Documents required: To purchase a property in India, an NRI needs to produce documents including a passport, address proof, a permanent account number (PAN card) and a recent photograph.
If you live in the USA and looking to purchase properties in India, you should consider hiring a professional real estate consultant to help you out through the complete process. A real estate investment company that has expertise in buying and selling properties in India can help you find the right properties to invest in the country by following all the provisions and regulations for NRI investment in India.