Vinayak Realtech

If you spend most of your time outside the house, do you become a less dedicated family member? Well, no, you remain one of the most valuable parts of your family, and the same applies to non-resident Indians (NRIs).They are Indians who spend at least 182 days outside India due to work or other issues. However, they are not less Indian and try their best to keep in touch with their roots. NRI Investment in India in real estate for this. If you are one of them and wondering how to do it, today’s article is for you. In this comprehensive writing, we will share every detail regarding the ways of NRI Investment in India.

Are NRI Investment in India Eligible here?

One of the biggest concerns of NRIs is whether they are eligible to invest in India. The answer is simple: yes, you are 100% eligible to buy properties. You are not only in the real estate market but also in the stock market, mutual funds, and many other fields.

However, if you are planning to invest, remember that the government closely monitors investments. The Foreign Exchange Management Act (FEMA) and the Reserve Bank of India (RBI) are responsible for monitoring and maintaining transparency in the foreign exchange market. Therefore, you must comply with all the legal requirements. Some of the guidelines of NRI Investment in India are –

• Both NRIs (Non-Resident Indians) and OCI (Overseas Citizens of India) are eligible to purchase commercial and residential properties in India.
• To buy the property, as an NRI, you don’t need to submit any intimation or send any communication to the Central Bank for the purchase of a property.
• You cannot buy agricultural land, plantations or farmhouses in India.
• You can purchase a property independently or jointly with another person.
• The joint owner can be a Resident Indian (RI) or an NRI/OCI.
• If you obtain the status of NRI after buying the property, the ownership will change.
• To handle all the transactions or procedures, you can appoint someone.
• In that case, you need to provide a Power of Attorney (PoA).
• The PoA holder will sign on your behalf and conduct property/loan-related transactions.
• You can use the property to earn some pennies through rent.
• The rent received from the property can be repatriated after paying applicable taxes (TDS of up to 30%) in India.
• There is no restriction on the number of residential or commercial properties you can purchase.
• You don’t need any permission to buy multiple properties for personal use, investment, or rental income.

What are the Essential Documentation for NRIs Buying Property in India?

For NRIs, some rules and regulations differ. You may feel confused about the required documents. Here is a glimpse of some mandatory documents-

●      Permanent Account Number (PAN) Card

A PAN card is one of the primary identity documents and is mandatory for all transactions. For a smooth procedure, carry the original card.

●      Overseas Citizen of India (OCI) or Person of Indian Origin (PIO) Card

The PIO card signifies your NRI status. The card holds other details about you and is mandatory for property-related transactions.

●      Passport and Proof of Current Address

Your passport is proof of your regular travel abroad (which brings you the NRI status). Through the process, you must showcase it to prove your journey. Additionally, you will need to present proof of your current address.

Utility bills (such as electricity, gas, or phone bills), bank statements, or rental agreements can be used for this purpose. However, ensure they are no older than three months. Furthermore, a driving license, government-issued ID cards, or a lease agreement can also be accepted.

Can You Claim a Tax Deduction on Home Loans?

Some of the rules and regulations are the same for Indian residents and NRIs. A tax deduction on a home loan is one of them. Nevertheless, you must proceed with the correct documents to expedite the process. Here are the points:

●      Section 80C

You can get a deduction of up to 1.5 lakh rupees per year on the principal repayment of a home loan.

●      Section 24(b)

Under this section, you can get a deduction of up to 2 lakh rupees per year on the interest paid on a home loan. However, to receive this benefit, the property must be either self-occupied or vacant.

What are the potential Challenges You Can Face?

Buying a property while you are not in the country is daunting. You should be aware of the potential challenges that may arise. It helps in preparing and mitigating them smoothly. Here is an overview of the challenges-

Lack of Scrutiny

As you cannot be present in the country throughout the process, a lack of scrutiny is obvious. This can lead to faulty legal documents, delayed procedures, and, in the worst-case scenario, disputes over ownership.

• Tip

Appoint a PoA and a lawyer. They would verify all the papers on your behalf and ensure the best possible outcome.

Zero Background Verification

Accurate verification regarding the builder and their reputation is crucial. If you fail, your investment may be wasted.

• Tip

Do not rely solely on advertisements; instead, carefully check the social media handles of the builder. It helps in forming an idea about their service quality. You ask your family and friends to verify whether the builder meets their words from the real customers.

Taxation and Financial Compliance

Understanding Indian tax laws, TDS deductions, capital gains tax, and filing income tax returns is crucial to ensure the property’s legal compliance. It may not be very clear to you.

• Tip

Conduct thorough research on taxation and hire an experienced lawyer to handle all legal matters.

Lack of Property Management

Only buying a property is not enough. You must maintain it properly to get the highest benefits of your investment.

• Tip

Appoint a caretaker to manage your property. You can check through a video call whether the individual is working.

Repatriation of Funds

NRIs often struggle with the legal process of transferring rental income or sale proceeds back to their country of residence.

• Tip

Hire a financial advisor to craft a dedicated strategy for you and introduce them to your lawyer. Their joint effort will help you obtain the amount while ensuring the legalities are met.

Final Thoughts:NRI Investment in India

It is teh high time to invest in Indian real estate. The sector is flourishing, driven by a stable economy, rapid urbanisation, and government-backed schemes. These factors are driving up property values, especially in emerging corridors.

To get the best returns, it is crucial to choose the location mindfully. Locations like Newtown and Rajarhat are the best for it. It is the newest economic zone of West Bengal. Reputed MNCs like TCS and Infosys have already opened their branches here. Besides the industry, the location boasts top-notch law and order, as well as other life amenities like schools, hospitals, and markets.

At Vinayak Realtech, we have multiple projects located here. Our residential complexes are equipped with the latest amenities. They also have high-grade construction quality and a unique layout. We take pride in offering homes at the most competitive pricing with all necessary assistance.

Connect with us to book your property now.