31st October 2021

Legalities of NRI Property Ownership In India

The Indian Real Estate sector is still holding on for NRI investors again. Due to legal interference, there remains a risk and uncertainty of real estate trading with NRI individuals. However, as per Indian laws, NRIs can invest and purchase the land or property both for residential and commercial purposes. Therefore buying NRI residential property in Kolkata, Mumbai, Bangalore, etc., is not difficult at all. Regarding agricultural lands, an NRI can acquire them as a gift from an Indian resident.
Property Will For NRI    
An NRI can surely transfer their residential or commercial property to their legal heir through the will. The only asset an NRI cannot transfer in the name of his son/daughter is an immovable asset like land. Again, you as an NRI can become heir to the NRI residential property in Kolkata and other Indian states from any other NRI or Indian resident. In such cases, RBI consent is required for the legal process.
Rates On Gifted Property
If an NRI decides to gift a residential or commercial property to their Indian resident relative or any other NRI, they can. The plan should not contain agricultural or farming land or a farmhouse. For such types of lands, an NRI can only gift it to an Indian resident and not any other NRI.

However, when you receive the land from the NRI as a gift, then it will fall under the category of income tax. Therefore at the time of registration, you will have to pay for stamp duty along with registration charges.
Relatives, including spouse, sister, brother, sister in law or brother in law, descendant or ascendant of you or your spouse, are all the individuals you can gift the residential or commercial property as an NRI. Tax exemption can only happen if you are gifting the property on a marriage occasion. 
Overseas Companies Investing In Indian Real Estate 
The Indian real estate sector allows you to invest from an overseas company outside India through FDA (Foreign direct investment). In this segment, you can invest in the following-housing buildings, townships, and built-up structures. However, overseas companies are not allowed to invest in completed building projects.
Process Of Fund Deportation From Real Estate For Getting Rent or Sale
The Indian Government grants you to repatriate the fund from selling the property as long as it stays within US$1 million and does not exceed. However, in this context, you should know that you have to pay both income tax and capital gains to the government in India. Now, for instance, if your country does not own or accept these taxes as they do not recognize them, then you might have to pay the tax twice.
Conditions For Fund Repatriation
You should know the following conditions for repatriating income through rent or sale of the property as an NRI;
1.    The selling property should be sold through foreign exchange rules and regulations during that period of selling.
2.    The repatriated amount should not increase the original sale price of the transaction
3.    Repatriation of the sale process can be done on two properties at maximum. These properties should be residential.
4.    You will get the repatriated funds after allowing income tax and other applicable charges.
5.    To begin the repatriation process, an NRI should contact a Chartered Accountant (CA specialist) in India.
6.    After you receive the CA-signed certificate on the 15C form, the bank will check through the papers and transfer your money to your abroad NRO account.

Previously, investing in the NRI residential property in Kolkata was difficult. However, now with the emergence of the RERA Act, the Indian real estate companies have added fine methods for easy investments on NRI properties. Therefore more NRIs are willing to purchase residential properties in India.

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