In the last few years, the Indian Government has relaxed many laws pertaining to NRI investment in real estate. These new laws have made it easier for NRIs or non-resident Indians to purchase property in their mother-land. This has resulted in the popularity of the foreign investment market. However, there are a few things that NRIs ought to be aware of before they consider investing in India’s real estate market. These pointers may give Indian passport holders residing abroad the confidence to purchase a property while ensuring they do not break any government laws.
Type of property that can be purchased: NRIs are allowed to purchase, both residential as well as commercial properties. There is also no restriction on the number of properties NRIs can own. However, they cannot purchase agricultural lands, plantations or farmhouse. The only case in which an NRI can own agricultural land is if he/she receives it as a gift or as part of his inheritance.
Number of investments: An NRI is allowed to make any number of investments as there are no restrictions. The investment can be made on their own or with the help of a relative appointed as a power of attorney. For instance, the NRI can hand over his power of attorney to a relative to purchase more than one under construction projects in Thane, Mumbai, Delhi, Kolkata or any other city or town within India.
Availability of loans: While resident citizens find it extremely easy to procure a home loan from Indian finance companies, the same benefit is also extended to NRIs. Yes, NRIs can now easily avail housing loans like any normal resident Indian. However, the documentation process for loans offered to NRIs is quite different as that for resident citizens. You can find out all the details about the documentation process on the NRI corner tab of the lender as well as the realtor’s website.
The need to file returns: Whether you are an NRI or a resident citizen, if your annual income exceeds ₹2,50,000, you are expected to file income tax returns. For instance, say you rent out your NRI investment in real estate home to a resident Indian and are earning over ₹3,00,000 in annual rental income, then you fall under the tax payer’s slab.
Tax benefits: If an NRI chooses to purchase a home in India, he/she is entitled to all the tax benefits which are made available to resident citizens. NRIs can claim an annual tax deduction of up to ₹1,00,000 as per Section 80C of the Income Tax Act of 1961. NRIs are only taxed for the income earned or collected in India through rental income or any other salary earned in India and not on their foreign earnings.
You can get all the details pertaining to NRI investment in real estate on the NRI corner tab of the real estate company’s website.Read More