Possibilities in Indian real estate development attract investors from every parts of the world and NRIs are looking to profit from by getting property or home in India. On the other hand, there are different rules and conditions that should be followed by the NRIs with the aim of possess a property in India. Here are a few steps which should be associated with an NRI for real estate investment in India;
Proof of eligibility: If any NRI and are looking for buying property in India, they should obtain a Person of Indian Origin (PIO) certificate just like eligibility proof. Just in case they don’t have PIO certificate, they can always produce your mother’s/father’s birth record and certificate for the eligibility.
The exchange control regulations: Unlike the early times, the limitations relating to NRI investments in Indian real estate have already been lessened. An NRI can simply invest in any Indian real estate property together with the funds received from regular banking. As well an NRI can hold a Foreign Currency Non-Resident FCNR account, Non-Residential External (NRE) account or even a Non Resident Ordinary (NRO) account to make property investments. An NRE account is essential for the agreements with NRO account is desirable to the depositing additionally, the transferring of cash.
NRE/NRO Accounts: As an NRI, you can choose from various types of accounts, designed for NRIs. Non-Resident Ordinary (NRO) Savings Account, Non-Resident External (NRE) Savings Account and Foreign Currency Non-Resident (FCNR) Deposit Account are some types of bank accounts available to NRIs.
If you want to maintain the account in rupees, then NRO/ NRE account is suitable for you. In an NRE account, your funds in foreign currency are converted into Indian rupees, at the rate prevailing at the time of making transfer the funds in the account. You cannot use this account to deposit your income earned in India. The principal as well as the interest is freely repatriable. If you want an account to transfer Indian earnings, NRO account is suitable for you. However foreign funds can be also be deposited/transferred to this account. The interest income earned on in this account is subject to tax in India. The interest is subject to income tax deduction at source @ 30% plus applicable surcharge plus education cess. You can repatriate up to USD 1 million, for bona fide purposes, per financial year from balances in NRO accounts subject to payment of applicable taxes Buying Processes
If you are an NRI, you should ideally remit funds from your bank to the Indian bank where your NRE Account is set up to buy a property. If you buy the property through the NRE account, then the source of funds is not required to be disclosed usually to any one as this is your inwards remittance. Please remit at least INR 500,000/- to 10,00,000/- in your bank accounts to India prior to your leaving your country where you are based. This will act as placing the down payment of at least 10% with the builder/property owners, if you are buying a property of around Rs 1 Crore, this amount can be proportionately increased if you are looking at high value properties.
Ensure that the documentation is in order & consider some NRI-friendly options: Permanent Account Number (PAN) card and Know Your Customer (KYC) registration are the mandatory requirements and so is a PIO (Person of Indian Origin)/ OCI (Overseas Citizen of India) card in case of Foreign citizens but of Indian Origin. NRIs should preserve all the statements of accounts and such other documents that concern their investments. Such documents can be preserved in e format. Small things like ensuring all cheques have NRE/NRO printed on them also helps. NRIs should preferably consider the “Direct Credit” option while investing into a mutual fund scheme in India. This helps save time and money than taking the credit through the way of cheque which may take 2 weeks before the funds are credited to the account. Investments made in financial assets like Mutual funds can have either or survivor mode of holding which helps in getting transactions executed in absence of another.