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Five things NRI buying property in India must know:

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NRIs buying property in India must know about the rules and regulations imposed by various Acts regulating in the country, Be it the Foreign Exchange Management Act (FEMA) or Income Tax Act or any other law. They must understand the compliances and conditions they need to follow before purchasing property in India. So, In this article we will be discussing five main key points which NRIs buying property in India must know about: Types of Property: RBI permission is needed for NRIs before investing any fund in Indian property. Though RBI has given the general permission to NRIs to invest their fund in Residential and commercial properties in India. However, RBI has prohibited NRIs to invest their fund in Farm house, Plantation property, Agricultural property. So, NRI buying property in India must know that apart from prohibited properties they can buy any property in India without any restriction and approval. Source of Financing the purchase of immovable property in India: NRI buying property in India must know about the channels through which purchase price should be paid. As per RBI guidelines, payment of purchase price for buying any immovable property in India must be made out of funds received in India through normal banking channels by way of inward remittance from outside India OR funds held in any Non- Resident account maintained as per the provisions and guidelines of RBI. So, no payment either made by traveller’s cheque or by currency notes of any foreign country or any mode other than those specifically permitted by the Reserve Bank. Power of attorney (POA): If NRI buying property in India is not able to physically present himself in India to execute the purchase then he has the option to execute a power of attorney (POA) in the name of any person who will act on his behalf in executing all the formalities in relation to such purchase. Taxation Provisions: Whenever NRI will sell the property, TDS will be applicable at the rate of 20% + surcharge and cess in case property is Long term capital asset and at the rate of 30% + surcharge and cess if the property is short term capital asset. This TDS shall be deductible on sale value and not on actual capital gain. So, NRI shall have to submit his Income Tax return and claim refund of excess TDS after filing his income tax return and assessing tax on the basis of actual Long term or short term capital gain as the case may be. Repatriation of Fund back to the Foreign Country: In the event of sale of immovable property by NRI, repatriation of sale proceeds shall be allowed only if the following conditions are satisfied:- NRI has acquired that immovable property by complying with all the provisions of Foreign exchange Management Act. The amount repatriated must not exceed the amount received through normal banking channels or funds lying in the Foreign Currency Non Resident (FCNR) account for acquisition of such immovable property In case of residential property , the repatriation is not allowed for more than two such properties. So, These are the basic checkpoints which a NRI need to follow while buying any property in India.
Contact Details
  Contact Name : Tony Joy
  Address : Navi Mumbai , Mumbai City , Maharashtra
  Posted On : 2019-12-11 16:38:48
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