10 Things NRIs Should Keep In Mind Before Investing In Pune Real Estate
Non-Resident Indians (NRIs) choose to invest in India for various reasons. The lucrative property market offers excellent ROI, and property ownership is a great way to stay connected with India.
The property market in Pune is a fast-growing one, and is one of the most preferred options among NRIs. Within Pune, a large number of NRIs choose to invest in Hinjewadi—Pune’s thriving IT hub. A 2 BHK apartment in Hinjewadi or a 3 BHK apartment in Hinjewadi are popular choices.
If you’re an NRI looking to make an investment in Pune, here are 10 things to keep in mind.
1. As per the Foreign Exchange Management Act (FEMA), an NRI or person of Indian origin (PIO) can acquire by way of purchase, any immovable property in India, other than agricultural land/plantation property/farmhouse.
2.An NRI can invest in both residential and commercial properties in India. However, any agricultural land, farmhouse and plantation property can only be owned if it is acquired by way of inheritance or is gifted.
3.The payment for purchase can be made out of funds remitted to India through a regular banking channel or through funds held in NRE/ FCNR (B)/NRO account maintained in India. Payments made outside of India and through foreign currency notes or traveller’s cheques are not allowed.
4.NRIs and PIOs can apply for a home loan in India for up to 80 per cent of the property value, depending on individual eligibility. The loan can be repaid through any of the following channels:
- Inward remittance through regular banking channels.
- By debit to self NRE/FCNR (B)/NRO account.
- By close relatives of the borrower, as defined in Section 6 of the Companies Act, 1956, through their account in India, by crediting the borrowers loan account,
- Through rental income earned by the property.
5.NRIs and PIOs can make a profit on the investment in terms of rental income, short-term capital gains and long-term capital gains. All of these incomes are taxable. However, the tax slab rate varies and exemptions can be claimed under sections 54, 54F and 54EC.
6. An NRI investor can avail of the same tax benefits on property purchase as a resident Indian. As an NRI, you can claim a tax deduction of Rs. 1 lakh under Section 80C of the Income Tax Act.
7.For NRIs investing in an under-construction property, the power of attorney may have to be transferred to the developer or a trusted person for smoother and efficient dealings.
8.The RERA Act has ensured timely completion of real estate projects, quality construction and complete transparency on the part of builders. This reform has also weeded out the untrustworthy and incompetent builders in the business, helping the sector retain only high-quality projects. This has made real estate investments much more reliable and lucrative.
9.The Goods and Services Tax (GST) and the Foreign Exchange Management Act (FEMA) have greatly simplified and made more reliable all the paperwork and processes related to property purchase in India, thereby restoring the faith of global investors as well as customers in India.
10.There are many shifts that are underway in the Indian real estate market, such as new models of realty development, a movement towards co-working spaces in the commercial sector, and focus on affordable housing options in the residential sector. This gives NRI investors a wide array of investment options to choose from.
Looking to invest in the residential properties in Pune? Call Kolte-Patil Developers on 1800-266-6654 – the leading real estate developers in Pune.