NRI Corner

The global standards of Salarpuria Sattva’s offerings have made it a trusted name among NRI investors. Our properties are in some of the most sought-after premium locations in major cities in the country. Not only do we offer world-class amenities and the best of features that NRI’s would expect to come home to, we also offer excellent returns on investment.  These factors paired with the excellent financial guidance that Salarpuria Sattva provides makes us a top-notch choice for NRI’s around the world.

Tips For Buying Property In India

1. If you are an NRI buying property in India you do not require any special permission. However, you have to make the purchase using Indian currency, the Rupee, through funds received in the country by means of normal banking channels.
2. The funds have to be maintained in a non-resident account under the Foreign Exchange Management Act (FEMA) and the Reserve Bank of India (RBI) regulations.
3. There are also no restrictions on the number of immovable properties that an NRI may purchase, either residential or commercial.
4. NRIs can buy all sorts of immovable properties in India other than agricultural land, farmhouse and plantation property.
5. To acquire agricultural land/plantation property/farm house in India, they have to get approval from the RBI and the government.
6. When an NRI sells a property in India, TDS (tax deducted at source) calculation is done at the rate of 20.6 percent on long-term capital gains and 30.9 percent on short-term capital gains.
7. The RBI has given a general permission to banks and housing finance companies registered with the National Housing Bank to provide loans to NRIs for buying residential property in India. Sanctioned in Indian currency, the loan has to be repaid using the same currency
8. As you live outside, NRIs have an option to give Power Of Attorney to their friends or relatives,  to complete the property purchase process in India.

A guide for NRI investing in Indian real estate
In a globalised world, with NRIs spread across the world, the top most question on their minds is how they can go about investing in real estate back home. Here are some of the important considerations for any NRI planning to invest in the Indian real estate market.

1. Firstly, from a regulatory perspective, there is no need for prior approvals while investing in real
   estate if an individual has an Indian passport. The Reserve Bank of India (RBI) has laid out simple and clear guidelines, which are governed under the Foreign Exchange Management Act (FEMA).
2. Secondly, there is no restriction on the number of properties that an NRI can invest and the assets
   include both residential and commercial properties. However, here there is a restrictive clause where an NRI cannot invest in agricultural land, plantation property or a farmhouse unless such properties are inherited or gifted to the NRI individual.
3. However, if an NRI wants to purchase a farmhouse or plantation, the individual will have to approach the RBI for a specific permission and the RBI will consider this on a case-to-case basis.
4. An NRI can purchase the property, either as a single owner, or jointly, with any other NRI. However,
   a resident Indian or a person, who is otherwise not allowed to invest in a property in India, cannot become a joint holder in such property, irrespective of the second holder’s contribution towards the purchase.
5. If there is a case where the individual owns properties in India and subsequently becomes an NRI, the status remains the same. It is the similar case with respect to agricultural land, plantation property or farmhouse, if the individual becomes an NRI later.
6. NRIs are also allowed to rent out their property and the rent received can be remitted after the appropriate taxes have been paid in India. NRIs are also allowed to sell or gift an immovable property to any person in India.
7. Here comes the important part for NRIs while investing in real estate. All the transactions have to be
   conducted in Indian currency and through banks located in the country. This requires the individual to have an NRI account in an authorised Indian bank.
8. As all the transactions are carried through the banking channels in India, the NRI should make use of
   the NRO/NRE account for all inward remittances. One can also issue post dated cheques or ECS from any one of the accounts like NRE, NRO or even FCNR.
9. Today, an NRI can easily secure loan for any investment in real estate in India provided the papers
   are in order. Here, care has to be taken that all the legal requirements in terms of paperwork is vetted by a lawyer. This also includes taking a no-dues certificate from the seller when the NRI is buying a property. One also has to ensure that there are no pending bills or dues with any authorities.
10. In order to encourage foreign remittances into India, there are several attractive NRI property loan
    schemes, which are offered by various banks.
11. There is also the critical element of power of attorney for the NRIs given the distance away from home. In case the NRI is unable to come to India, the documents pertaining to the purchase can be executed by any person, who is given a valid power of attorney. If one is buying an under- construction property, the NRI will have to give the power of attorney to the builder or a trusted associate. One needs to take care that the documents are properly worded with the assistance from a lawyer so that there no chance of forgery to secure the investment made into real estate.
12. The NRI while investing in real estate in India can also avail of tax benefits. An NRI can claim a
    deduction of Rs one lakh under Section 80 C of the Income Tax Act, 1961. As far as the transactions with regard to real estate is concerned, short-term capital gains apply on the profit earned through the sale of a property, within two years of its purchase. The capital gains for such property are calculated as the difference between the sale proceeds and the cost of acquisition. It is taxed as per the applicable slab rate for the NRI.
13. The long-term capital gains (applicable when the property is held for more than two years) are taxed
    at 20 per cent. However, unlike short-term capital gains, exemption can be claimed under sections 54, 54 F and 54 EC.
14. NRIs can look forward to investing in Indian real estate market as the guidelines are very clear with no room for ambiguity.

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