5 things NRIs buying property In India must know
September 5, 2022|Posted in: real estate
Are you an NRI planning to buy a luxury flat in Kochi? As an NRI planning to buy an apartment in Kerala, you should know certain things before you make the decision. The premier real estate portal for buying flats in Kerala helps you to take a look at 5 things NRIs buying property in India must know.
NRIs need no special permissions to buy immovable property in India & can buy any number of properties. But, the payments should be done only in Indian currency sourced through funds received in the country. Normal banking channels maintained in a non-resident account under the FEMA Act and the RBI regulations can be used.
As NRI investments are treated equal with Indian resident investments & agricultural land, farm house and plantation property are exempted from buying. These can be purchased only with RBI & government approval.
If as an NRI you want to sell your flat in Kerala, TDS is calculated at the rate of 20.6% on long-term capital gains and 30.9% on short-term capital gains. NRIs with a lower tax slab applicable can apply for a refund of the TDS by filing their income tax returns.
NRIs can get housing loans from banks and housing finance companies registered with the National Housing Bank. The loan amount cannot be credited directly to the NRI bank account as per regulations, but has to be disbursed directly to either the seller’s/developer’s account. Repayment can be done using NRI’s NRO/NRE account or FCNR deposit funds.
Power of attorney (PoA)
As NRIs are living outside India, they have an option to give PoA to their friends or relatives. The PoA can be general or specific for the property purchase.
Repatriation of funds back to the foreign country
An NRI or Person of Indian origin (PIO) may repatriate the proceeds from the sale of immovable property in India on these conditions:
- The property is purchased as per FEMA directives.
- The amount repatriated should not be greater than the original amount paid for the property.
NRI/PIOs may repatriate a maximum of $ 1 million per financial year:
- If the property was bought out of rupee source of funds from the balance held in NRO account.
- If the property was obtained by way of gift, the sale proceeds must be credited to an NRO account and can be repatriated thereafter.
- If the property was inherited from a resident Indian, on producing documentary evidence proving inheritance, an undertaking by the NRI/PIO, and a certificate of an authorised chartered accountant in the formats prescribed by the Central Board of Direct Taxes (CBDT).
Repatriation is restricted to less than or equal to two in residential properties. Pakistan/Bangladesh/Sri Lanka/China/Afghanistan/Iran citizens must seek specific approval from the RBI.