Rules For NRI Investment In The Indian Real Estate

NRI real estate investment India has become a popular choice for non-resident Indians across the globe. The recently implemented economic and regulatory reforms have further boosted foreign investments into India’s realty sector. Moreover, the falling rupee has got an increasing number of NRIs rushing to invest in Indian properties for attractive returns.

If you are an NRI looking to invest in the Indian real estate market, here are some rules you may want to be familiar with:

1. According to the Foreign Exchange Management Act (FEMA), an NRI (Non-Resident Indian) or PIO (Person of Indian Origin) can acquire, by way of purchase, any immovable property in India, other than agricultural land/plantation property/farmhouse. As an NRI, you 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.

2. As an NRI, you can make the payment for the property purchase out of funds remitted to India through a regular banking channel or through funds held in a NRE/ FCNR (B)/NRO account that is maintained in India. Payments made outside of India and through foreign currency notes or traveller’s cheques do not qualify.

3. Like resident Indians, NRIs as well as 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.

NRI Real Estate Investment India: Key Rules to Know

· 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 borrower’s loan account.

NRI property owners can also choose to repay the loan using the rental income generated by the property.

4. NRIs can earn ROI in terms of rental income, short-term capital gains and long-term capital gains. While all of these incomes are taxable, an NRI investor can avail of the same tax benefits on property purchase as a resident Indian. The tax slab rate is variable and exemptions can be claimed under sections 54, 54F and 54EC. Under Section 80C of the Income Tax Act, the NRI investor can claim a tax deduction of up to Rs. 1 lakh

5. 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.

FEMA Regulations and Repatriation Guidelines

Invest in the perfect home at Centria (The project has been registered via MahaRERA registration number P52100016567), a premium residential project by Kolte-Patil Developers Ltd., with 3 BHK Garden Apartments in Undri, Pune.

NRIs can explore premium properties with Kolte-Patil projects in Pune. Verify RERA registrations on MahaRERA.

About arfat@netbiz.in

arfat@netbiz.in is a content contributor at Kolte-Patil Developers, one of Pune's leading real estate companies with 30+ years of experience.

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