NRI Real Estate Investment in India- Beneficial or Not?

We all are aware of the Narendra Modi’s freakish cash clampdown, which is a great revolution in India. Nowadays real estate prices across the world are sinking but on the other hand, real estate property investment in India is ringing. This is a right time for NRI Real Estate Investment growing because no doubt it will bring higher appreciation in the years to come and the investment made today will never disappoint you in future.

Before proceeding into NRI Property Investment in India, you should first complete your homework about the provisions of the Foreign Exchange Management Act and the Income-tax Act. A good knowledge of these two sectors will help NRI’s to take the fruitful decision of Investments in properties.

Best NRI Real Estate Investment in India:

nri-real-estate-investments
nri-real-estate-investments

According to Foreign Exchange Management Act, any Indian citizen who lives outside the India has full rights to buy any immovable property in India other than farming land, farm house and plantation property. It is very clear in every norm that NRI can also enjoy all the benefits that the resident Indian are enjoying.

Besides all these relaxations there is some regulation on selling of Property by NRI’s. Under the guidance of FEMA, NRI’s can sell any commercial or residential property to whom they want to sell it. But if they have any parental agricultural property or farm house then they can sell it only to Indian citizen who resides in India. NRI’s are allowed to gift their property to another NRI or the person of rooted with India. As we all know that properties are also beneficial for tax savings and under the Income tax act NRI can claim Rs 1 lakh deduction in their income tax. Some other advantages are also added for NRI’s if they are buying properties on loan. Also, NRI’s have to pay a TDS at the rate of 1% if they are purchasing property more than Rs. Fifty Lakh and if their property is vacant then they don’t need to give wealth tax on their property. This wealth tax relaxation is only for those who has single property. If they have many vacant properties, then NRI’s have to pay 1% tax on the value in excess of Rs 30 lakh. Similarly, if they rent out their properties then they have to pay income tax on the amount of rent. And when they want to sell their property, then according to Income tax act they have to pay capital gain tax. If their property is 36 months older then they can achieve long-term capital gains benefits over their property.

According to Anil Rego of Right Horizons “If a property is held for 3 years, it is treated as long-term capital gains and taxed at 20%. Short term capital gains (any term shorter than 3 years) are added to income and taxed at the normal rate of tax. There would be a 20% TDS for NRIs on a sale of propertyā€¯.

Still, if you have any doubts regarding buying and selling the property under Foreign Exchange Management Act, then you can take the help of selling Guide in India which will guide you about all the Documents, taxes and tips related to NRI Real Estate Investments in India.

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