Guidelines for NRIs buying property in India
India’s real estate growth prospect lure investors from every parts of the world and NRIs are looking to capitalize by buying property in India. However, there are various rules and norms which should be followed by the NRIs in order to own a property in India. Here are a few steps which should be followed by an NRI for property buying;
Proof of eligibility:
If you are an NRI and are looking for investing in a property in India, you should obtain a Person of Indian Origin (PIO) certificate as an eligibility proof. In case you do not have your PIO certificate, you can always produce your mother’s/father’s birth certificate for the eligibility. However, these documents should be submitted to the Indian embassy of the particular country.
The exchange control regulations:
Unlike the initial times, the restrictions relating to investment by NRIs in Indian properties have been lessened. An NRI can easily buy a property with the funds received from regular banking. Also an NRI can hold a Foreign Currency Non-Resident FCNR account, Non-Residential External (NRE) account or a Non Resident Ordinary (NRO) account to make a property purchase. An NRE account is required for the pay outs and an NRO account is required for the depositing and the transferring of money.
Repatriation:
Once the relevant income tax and capital gains at the time of sale proceedings are deducted from the account, one can repatriate the funds from the NRE account to the foreign account.
Selling property:
If an NRI owns a property in India and wants to sell it away, he/she can sell it to another NRI or any person residing in India who is free from any legal issues. However, the purchase or sale of a farm house or other agricultural land is not permitted, but gifting of an agricultural land or a farm house or plantation land is permitted to a resident of India. The same follows with an NRI or a PIO.
Renting property:
In case if an NRI wishes to rent out a property, he/she can rent the immovable property. However, the rental income or the profit which is made as returns from the property will be eligible for repartition for payment of taxes and payment of a certificate which is produced by a chartered accountant.
The power or attorney:
It is advisable that an NRI should give the power of attorney to an Indian resident who is trust worthy. In case the NRI is not present in India for the legal formalities, the trusted person can complete all the formalities.
The home loan:
An NRI can avail a home loan in India for the purchasing of a property. A home loan of about 85-90 per cent can be taken and further the loan will be disbursed to him/her at the time of buying a property.
