NRIs Investing in Indian Real Estate
Aug 22, 2018 Real Estate News
Are you a Non-Resident Indian (NRI) who is keen to invest in real estate in India? Well, Indian policy welcomes you to make real estate investment, with some laws applicable.
NRIs investing in real estate: NRIs are allowed to invest in real estate development activity via Indian companies. As per the new policy, an ongoing project, regardless of area expanse, can have access to FDI. However, there is a lock-in period (three years) after which a minimum investment can be repatriated. People also route investments via Mauritius or Singapore to make use of tax treaty provisions.
NRIs/PIOs in Real Estate Investment in India
Inheritance: NRIs are allowed to inherit Indian real estate from a resident or non-resident, provided the property of the deceased is under exchange control regulations.
Along with all these, note that succession laws in India are region and community-specific. Therefore, planning in advance is vital.
Tax regime
NRIs are liable to pay tax for the Indian source of income only. However, if you are travelling to India to manage your property, then your travel expenses are not deductible from the income tax as per Income Tax Act, 1961.Foreign exchange and control
As per the Section 47, Foreign Exchange Management Act, 1999, the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000, is applied on NRIs' immovable property transactions or any other transactions that involve foreign exchange. As per Reserve Bank of India, such FEMA transactions are classified as capital account transactions (such as real estate investment) and current account transactions.Investment in Independent Premises
In such cases, NRIs or persons of Indian origin (PIOs) need to provide evidence that land on which the purchased property has been built does not belong to agriculture or any plantation property. This clause is because an Indian agriculturist can only buy such land.NRIs investing in real estate: NRIs are allowed to invest in real estate development activity via Indian companies. As per the new policy, an ongoing project, regardless of area expanse, can have access to FDI. However, there is a lock-in period (three years) after which a minimum investment can be repatriated. People also route investments via Mauritius or Singapore to make use of tax treaty provisions.
NRIs/PIOs in Real Estate Investment in India
Direct procurement
NRIs/PIOs can buy a real estate in India directly (excluding farmland/house and plantation property). There is no restriction on the number of properties. Payment can be made via funds received in India through banking channels or funds held in any NRI account maintained under FEMA.Gift
Gifts are allowed under the exchange control regime, with applicable Indian stamp laws.Inheritance: NRIs are allowed to inherit Indian real estate from a resident or non-resident, provided the property of the deceased is under exchange control regulations.
Investment for Foreign Nationals
No direct acquisition or joint ownership is allowed. Citizens of Asian countries (Afghanistan, Bangladesh, Bhutan, China, Iran, Nepal, Pakistan and Sri Lanka) would require a permit to purchase property in India. If a Foreign national want to sell or gift a residential or commercial property to any Indian citizen or even NRI/PIO, it is allowed with approval of RBI.Along with all these, note that succession laws in India are region and community-specific. Therefore, planning in advance is vital.
Looking for property portal?
Related Articles
-
-
-
GST to Boost the Real Estate Sector of the Country
Jul 17, 2017 -
