Why investing in real estate the best option for NRIs
Aug 09, 2017 Home Trading Steps
NRIs generally get confused about where to invest in their home country. Real estate, right now, is the best option for them to invest in. The recent government policies and norms are making it easier for the NRI investors to take a step towards investing in real estate. Even the country’s economic stand in the global platform has improved and brought many investors to think about the country’s real estate as a fruitful investing place.
NRIs certainly can enjoy benefits of investing in India:
1. Property prices:
The NRIs should make the most of the slow real estate market of the country. The prices of the properties are comparatively low right now. The India real estate market is costly as compared to the matured real estate market of the West. This promises better return in future as compared to other prominent markets of the country.
2. Tax exemption:
NRIs can enjoy tax exemption on the property just like any other regular India resident. NRIs can claim a tax deduction on the home loan on the principal amount and interest component. Apart from this, if the NRI sells his property in India after two years, then the profit earned on the capital gain is exempted from the income tax.
3. Rental income:
NRI can earn rental income in India without any trouble. Even though 30 percent TDS is deducted by the tenant, the remaining amount can be repatriated under the Foreign Exchange Management Act Rules. The proceeds earned by the sale of immovable property in India can also be repatriated under the act.
4. Retirement benefits:
India is still working on the reverse mortgage system that is a very common practice in the US. The investors who are looking forward to retiring and are planning to invest in India can look forward to this. The amount taken from the bank for this type of mortgage is not taxable for NRIs. This is beneficial for the retiring investors as they can take the money from the bank and enjoy the benefit of their property in India without having to worry about the taxes.
There are certain factors as well that the NRIs should keep in mind while investing in the country. It is advised that the NRI investors should visit the property physically before investing in it. This will save them from any confusion in future regarding the property.
NRIs certainly can enjoy benefits of investing in India:
1. Property prices:
The NRIs should make the most of the slow real estate market of the country. The prices of the properties are comparatively low right now. The India real estate market is costly as compared to the matured real estate market of the West. This promises better return in future as compared to other prominent markets of the country.
2. Tax exemption:
NRIs can enjoy tax exemption on the property just like any other regular India resident. NRIs can claim a tax deduction on the home loan on the principal amount and interest component. Apart from this, if the NRI sells his property in India after two years, then the profit earned on the capital gain is exempted from the income tax.
3. Rental income:
NRI can earn rental income in India without any trouble. Even though 30 percent TDS is deducted by the tenant, the remaining amount can be repatriated under the Foreign Exchange Management Act Rules. The proceeds earned by the sale of immovable property in India can also be repatriated under the act.
4. Retirement benefits:
India is still working on the reverse mortgage system that is a very common practice in the US. The investors who are looking forward to retiring and are planning to invest in India can look forward to this. The amount taken from the bank for this type of mortgage is not taxable for NRIs. This is beneficial for the retiring investors as they can take the money from the bank and enjoy the benefit of their property in India without having to worry about the taxes.
There are certain factors as well that the NRIs should keep in mind while investing in the country. It is advised that the NRI investors should visit the property physically before investing in it. This will save them from any confusion in future regarding the property.
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