With the recent RERA Act 2916, the Indian real estate market has attracted more non-resident Indians (NRIs) to invest in the country. One of the moves to attract such investments has been the non-repatriable investments of NRIs in the country, which is now considered as a domestic investment. Besides, any investment in the real estate from the funds taken from an NRI's Indian account in India would be considered as a domestic investment as well.
 
At times, several regulations that govern the investments of NRIs in the Indian real estate market can be confusing. Know some tips about money transfer in India when you decide to buy a property in the country.
  • To buy a property in India, the NRIs are free to use the money in their Non-Resident External (NRE) or the Non-Resident Ordinary (NRO) Savings account or even in the Foreign Currency Non-Resident (FCNR) account in India. NRIs are even allowed to transfer money to India in case it is the income which is earned overseas or from their personal savings abroad.
  • NRIs can remit the money via any normal banking channels from the place of their current residence to India. For example, their NRE or NRO accounts are considered as normal banking channels. However, one must be careful while transferring money. If the country of current residence does not have a Double Taxation Avoidance Agreement with the country, the amount is taxable in both the countries.
  • In case an NRI wants to avail home loan, then lenders can lend up to 80 per cent of the money. The borrower is expected to repay the principal amount as well as interest rate through the same channel. NRIs can be benefitted from tax deductions on the interest payment. Since there is no upper limit on this, the NRIs are expected to pay the capital gains tax in case of selling their real estate assets. NRIs can avail home loan against the money they may have deposited in their NRE or FCNR account if it is up to INR 1 crore.
  • Buying any property with the help of funds received from conventional banking is not difficult. In the case of payouts, NRIs need an NRE account. For depositing and transferring money to India, NRIs require an NRO account. Money can also be repatriated from their NRE account to their foreign account after income tax and capital gains tax deduction.
  • NRIs can opt to make equated monthly instalment (EMI) payments for their property in India either via their NRE account or NRO account or even via FCNRbank account. Direct remission of money from abroad is also allowed.


 
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