HOW CAN NRIs INVEST IN REAL ESTATE IN INDIA

HOW CAN NRIs INVEST IN REAL ESTATE IN INDIA

Posted By : Admin | Date : 27 Mar 2019

NRIs (Non Resident Indians) or PIO (Person of Indian Origin) form a major chunk of investors in the Indian Real Estate Market. A major reason has been emotional reasons in the past. However with the growing economy and earning capacity in comparison to INR, more and more NRI’s are investing in real estate in India purely for investment purposes. According to a recent survey, it was found that overseas investments in Indian real estate have gone up by almost 130% from USD 3 billion in 2014-16 to almost USD 8 billion in 2017-18. With the emerging trends it has been clearly found that they are more and more investing in Commercial Real Estate (CRE) as that’s where the Return on Investment (ROI) is way higher in comparison to Residential properties.

WHAT KIND OF PROPERTIES CAN NRI’s INVEST IN?

NRI’s are allowed to invest in any immovable Residential or Commercial property in India. There is no limit on the number of such properties that you can invest in so far.

They cannot invest in agricultural land, plantations, farms, farm house resulting in tax free agriculture income.

HOW CAN YOU DO FINANCIAL TRANSACTIONS FOR YOUR INVESTMENT?

NRI’s can invest using the following methods:

  • Through their NRE/NRO/FCNR(B) account
  • Through regular banking channels from overseas
  • No Travelers’ Cheque or foreign currency is acceptable
  • No financial transaction to be made outside of India

ARE YOU ELIGIBLE FOR A LOAN?

Like all regular Indian citizens you are also eligible for a loan up to 80%, depending on the kind of property and your own eligibility. The ways you can pay the loan amount:

  • Through their NRE/NRO/FCNR(B) account
  • From rental income from the property
  • Through regular banking channels from overseas
  • Section 6 of the Companies Act 1956 states that your relatives can credit your loan account through their own account in India.

TAXATION:

RENTAL INCOME: Any rental income accrued in India is taxable, irrespective of the residential status.

SHORT TERM GAIN: Any profit earned from the sale of the property within 2 years of purchase is termed as Short term gain and is taxable as applicable as per slab rates for NRI’s.

LONG TERM GAINS: Any profits from sale of property after 2 years of purchased are termed as Long term gains and are taxed at 20%. However exemption claim can be made in such investments under section 54, 54F and 54EC.

With the intervention of the Government body RERA (Real Estate Regulatory Authority) since 2016, not only Indian residents but also NRI’s are investing without any fear of their hard earned money being at any form of risk. Real Estate investment is at its safest point till date, with Commercial properties churning out maximum profits for Investors.

So if you are an NRI, this is a great time for you to invest in Real Estate in India without any fear and maximize your ROI.

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