The value of Indian Rupee is quite something that has been attracting Non-reserved Indians to invest in land here for a while now. Moreover, most NRIs still like to have a piece of their own property back here in India. If you are an NRI (Non-resident Indian) who is planning to buy a property in India, this is one fine time to make a purchase. Even though the real estate sector in India has undergone a price correction in recent years, purchasing property has also become pretty lucrative at flattering currency rates.
As an NRI, you do not need the special consent of the government to buy an immovable property in India as per the Reserve Bank of India (RBI). However, the only obvious prerequisite that needs to be considered is that the payment cannot be made in foreign currency. You can only purchase properties here with Indian currency that is the Rupee. This can be received through funds in India via normal banking channels. Such funds are further maintained under the Foreign Exchange Management Act (FEMA) in a non-resident account.
As one of the most trusted realtors in Bangalore, we, at PC Realty, make the process of buying a plot for you extremely simplified. We take care of all the plot buying formalities for NRIs without any hassle so that your experience back in the country is excellent.
Here are five things that we, at PC Realty, recommend you to know if you’re looking for properties to buy in India as an NRI. In India, NRI investments are treated on par into the property market with that of Indian residents except for the following exceptions:
Nature of property
Plots for NRIs in India have no restrictions on the number whether they are residential or commercial. However, not all types of properties are purchasable without any restriction for NRIs. In India, non-resident Indians can only buy plots other than agriculture, plantation property or farm houses. For purchasing agricultural, plantation or farm property, special permission is required for NRIs from the Reserve Bank of India and the government.
Although the final taxation rate for NRIs is similar to that of the Indian residents, the TDS (tax deducted at source) is calculated differently. For long-term capital gains, the calculation is done at 20.6 percent and for short-term capital gains, it is calculated at 30.9 per cent for NRIs. However, if a lower tax slab is applicable to an NRI, he may file for the Income Tax Return to get a refund of the TDS.
NRIs are eligible to apply for home loans in India to purchase residential properties herein as per the Reserve Bank of India and the government. However, this loan will only be sanctioned in the Indian currency and has to be repaid in the same. The loan amount, as pee the regulations, will also not be credited to the NRIs bank account. Instead, the amount will go directly into the developer or the seller’s account. The NRIs can use funds in their NRO/ NRE accounts or FCNR deposits to repay the loan amount.
Power of Attorney (PoA)
As per the rules and regulations, an NRI may exercise the option of giving the power of attorney to their friends or relatives who live in the country as they reside abroad. The PoA can take care of the property purchasing process. The rights of your representative can be general or specific as the PoA.
Repatriation of funds
Certain rules regulate the repatriation of funds back to the foreign country where you’ve been residing as an NRI. As the Person of Indian Origin (PIO) or NRI, you may repatriate the sale proceeds from the immovable property in India under the following conditions:
- The property sold must have been purchased according to the FEMA directives applicable during the purchase.
- The repatriated amount cannot be greater than the original amount paid for the property if the property was bought with foreign exchange released through normal banking channels or funds held in FCNR (B) accounts.
However, under the below-mentioned conditions, the NRI is eligible for a relaxation of up to $1 million per financial year:
- Due to balance held in an NRO account if the transaction for the property was made out of rupee source of funds
- Proceeds from sales should also be credited to an NRO account if the property acquired was a gift. The amount may be repatriated thereafter.
- Funds may also be repatriated by an NRI/PIO if he has inherited the property from an Indian resident provided there’s documents proving the inheritance, an undertaking by the individual and an authorised certificate from a chartered accountant in accordance with the formats prescribed under the Central Board of Direct Taxes (CBDT).
As far as residential properties are considered, only the sale proceeds of up to two properties can only be repatriated abroad.
With prior consent from the RBI, a foreign national is allowed to repatriate sale proceeds of a property even if it was inherited by a person outside India. However, citizens of Pakistan, China, Afghanistan, Iran, Bangladesh and Sri Lanka are obliged to take special permission from the Reserve Bank of India for repatriating sale proceeds of a property.
Besides these specifics, NRIs are treated equally as Indian residents in the real estate domain. At PC Realty, we make sure that the process of buying plots in Bangalore is extremely simplified for both resident Indians as well as NRIs. In case you’ve been planning to invest in real estate in Bangalore, which is one of the fastest growing cities of India, you may reach out to us through email or simply drop a text on our Instagram page. Rest assured while we bring to you your perfect match!