Will or fate might have paddled you overseas and given you the tag of an NRI but that doesn’t set you apart from any other regular Indians residing within the boundaries of the country especially when it comes to investing in real estates. Real estate investments are one of the prime contributors of Forex inflow into the Indian economy. Building a residential/commercial asset in India for an NRI becomes very convenient with the reformatory changes and simple guidelines set by the government of India. Pouring in the additional surplus of your income overseas into residential properties in Kolkata, Bombay, Delhi or any other city in India. It promises generous long-term returns. As of 2018 reports, this phenomenon has already shown significant results because of its hassle-free and efficient functioning. Certain formal requisites and guidelines established by the Government of India for NRIs to invest in real estate properties in India are as follows.
1. Basic documents: NRIs planning to invest in real estates in India must hold a valid Indian passport and a PAN card (permanent account number).
2. Types of property: An NRI can only invest in either commercial or residential properties. Agricultural lands, plantations or farms are off-limits unless otherwise inherited or gifted.
3. Transactions: All investments are supposed to be made in Indian currency using an NRE (non-resident rupee) and NRO (non-resident ordinary rupee) account from any Indian bank or FCNR (foreign currency non-resident) deposit account to avoid forex fluctuations. NRIs are eligible to apply for home loans in case of unavailability of sufficient funds. The loan too, however, has to be repaid in Indian currency using the above-mentioned bank accounts.
4. Taxation: The reserve bank of India has set up a special cell Foreign Exchange Management Act (FEMA)Tax Act that deals with NRIs investing in Indian real estate industry which allows few tax deductions that are mentioned under the Section 80C to 80TTA reducing the tax burden on the NRIs. NRIs are entitled to pay taxes the same as other Indians on capital gains.
5. Lease and rent: NRIs have no restrictions on leasing out or renting out their real estate properties. Ensure to do a background check on the tenants.
6. Power of Attorney: In the absence of the physical presence of the NRI for any important event related to the property, an NRI can appoint anyone like a friend, relative to legally represent them to complete any transaction. POA is a legal document that gives power to a set representative who can fill in the absence during any property related business like selling, mortgaging, leasing, etc.
7. Verifications: All NRIs should have a thorough background check done on the builders, owners or real estate companies whose properties are being purchased. One should always try to engage in a direct transaction and avoid all forms of middlemen and brokers to avoid complications and scams.
8. Limitations: As discusses earlier, all NRIs with a valid passport can engage in real estate transactions baring citizens belonging to the countries of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan who are not allowed to buy or sell real estate properties without prior permission. However, they are eligible to lease properties within India which should not exceed more than five years.
Investing in real estate for NRIs has not only been a profitable business but also works on an emotional ground where an NRI can always be connected to their homeland. The Indian government has made this whole journey simple and problem-free. Check out one of the top real estate company in Kolkata, Srijan Realty when thinking of your next real estate investment. For more details on the best residential complex in Kolkata visit www.srijanrealty.com.