Indian real estate and NRIs

For a Non-Resident Indian (NRI) or Overseas Citizen of India (OCI), buying a property back home is not just a profitable investment opportunity but also fills an emotional void, something for them to come back to after retirement. With the steady increase in property prices and more inclusive buying opportunities, real estate has become an attractive long-term investment solution for investors. It is also a bonus that the Real Estate Regulation Act (RERA) makes it worthwhile for overseas investors whose interests are safeguarded as buyers.

As a matter of fact, the Reserve Bank of India sees foreign investments in real estate as a valuable contribution to the Indian economy. According to the Real Estate transaction under Foreign Exchange Management Act (FEMA) – an NRI or person of Indian origin (PIO), as defined in FEMA, can acquire by way of purchase, any immovable property in India, other than agricultural land, plantation property and farm house. It is interesting to note that NRIs or OCIs can hold as many permitted immovable properties in India and even inherit properties including agricultural land.

Even for the transactions involved in making the property purchase, Indian real estate market is straightforward. The payment can be made through regular Indian recognised banks and also through various schemes and accounts such as Non-Resident Rupee Account Scheme, Foreign Currency (Non Resident) Account Scheme and Non-Resident Ordinary Rupee Account held by the NRI or OCI in India.

If the NRI wishes to apply for loan to buy a property in India, they can do so by approaching financial institutes that are registered with the National Housing bank. The transaction must be made in Indian currency. An NRI is entitled to the same tax benefits as any resident of India. But NRIs have to pay a withholding TDS at the rate of 1% if they decide on buying a property worth more than Rs 50 lakh. On the plus side, no tax will be levied in case the property is purchased for self-use.

Even when it comes to rent, the amount will be treated as income in India and is taxable, irrespective of the residential status of the individual. There is a standard deduction of about 30% on TDS, which has to be deducted by the tenant.

India’s welcoming policies for its real estate makes it substantially easy for an NRI to own a property in India. The documents required by an NRI to buy a property in India are a passport, address proof, a permanent account number (PAN card) and a recent photograph.

Even in a case of an emergency an NRI/OCI can transfer any kind of immovable property to a person who is a resident in India. With the pandemic still looming, it may not be possible for the NRI to be physically present for the process and can seek help through POA – Power of Attorney. A POA enables the NRI to pick an individual to complete the transaction on their behalf. Since real estate deals can involve a large amount of money, it is wise to have a capable lawyer oversee all the transactions and paperwork.

For NRIs, the real estate in India is a lucrative opportunity worth exploring for long-term gains. It is important to look for established builders like Radiance, who not only give assured quality but also amenities worth the investment. With world-class features, solid foundation and a reputable name, Radiance offers its buyers properties that can fit their budget easily. So if you are planning to invest in real estate, choose a builder who will give you transparent and life-long benefits.