To be categorised as a Non-Resident Indian (NRI), an individual needs to spend a minimum of 183 days consecutively in a country other than India. The factors that get you considered as an NRI are more vast than just this, however, that’s not what you came here for.
If you’re trying to find out how to make a good property investment in India as an NRI, you clearly already classify as one. The laws and regulations that apply to an NRI are significantly different from those that apply to individuals with Resident status in India.
The rules and regulations that NRIs need to follow while buying property in India are listed in the Foreign Exchange Management Act (FEMA). The Act also covers the rules and regulations under which any Person of Indian Origin (PIO) can also buy property in India.
The following are points that need to be kept in mind while buying property in India as an NRI.
How Can An NRI Buy Property In India
NRIs can inherit any type of property in India. However, buying a property after becoming an NRI is a different story.
Thus, an NRI can own and hold any type of property under their name be it residential property, commercial property, agricultural land, farmhouses, or even a plantation. But they aren’t allowed to buy all these types of properties or even receive them as a gift once they have been deemed an NRI as per the Indian government. They can only hold the title to any of these properties if they owned them before they received NRI status or inherited them.
An NRI can only buy residential or commercial properties in India. There are also no upper limits to how many of these properties an NRI can hold. In special cases, the RBI does allow NRIs to buy restricted property types, agricultural land, plantation, and farmhouses. This is done on a case-to-case basis upon receiving a request from the concerned party.
In cases where the NRI is unable to travel to India and be physically present during the purchase of property, a power of attorney can be used. The concerned individual can give their power of attorney to anyone they deem fit and that person can carry on the purchase on the NRI’s behalf.
NRIs can also jointly hold properties that they are legally allowed to hold.
Also Read: NRIs Looking for Home Loans in India Must Know These Details
Property Tax And Other Charges For NRIs While Buying Property
Similar to any other property owner in India, an NRI is also liable to pay taxes and charges on their property purchase. You will be required to pay the stamp duty, registration charges, property taxes, and even the GST for an under-construction property.
Any rental income earned by an NRI is also subject to Tax Deducted at Source (TDS) at the rate of 30%. As per Foreign Exchange Management Act (FEMA) rules, the remaining amount will be repatriated. The repatriation of the proceeds from the sale of immovable property is done post TDS of 20%-30% as per the type of capital gain, short-term capital gain or long-term capital gain.
Documents Required By NRIs To Buy Property In India
The following documents are the most basic documents required by an NRI to purchase a property in India.
1. The most important documentation to buy property in India for anyone, is the Pan Card. you must hold a valid PAN card to make this financial transaction,
2. The legal documentation that proves you’re an NRI is your passport which must be furnished while buying a property in the country.
3. In case you’re a Person of Indian Origin or an Overseas Citizen of India, you must also furnish your OCI card while making a property purchase.
4. In case the NRI is not available to undertake the property purchase themselves, a power of attorney also needs to be furnished.
5. Current address Proofs are also required for NRIs.
Documents Required For NRIs To Receive Home Loan In India
1. A copy of your Indian Passport.
2. OCI card in the event the person doesn’t hold an Indian passport.
3. Any employment contracts, work permits or visas, from the country of residence.
4. Income tax returns filed last.
5. Salary proof and payslips for the past six months.
6. NRE and NRO bank account statements for the previous six months.
7. Bureau report of the residence country.
8. Power of Attorney in case of absence.
Documents You Must Check As An NRI Buying Property In India
1. A Title Certificate free of any encumbrances.
2. Building permits approved by the local civic authority.
3. Building plans approved by the local civic authority.
4. Mother Deed of the property.
5. Occupation Certificate.
6. Share Certificates from Co-operative Housing Societies.
7. RERA registration proof.
8. NOC from Society
9. Sale deed.
If you’re an NRI looking for property in India, it is better for you to choose a route that is trustworthy. We at Clicbrics become a one-stop solution for NRIs to find the right property that suits their needs and help them throughout their home-buying journey.