The NRI or the global Indians are among the largest contributors to the Indian forex reserve through various investments in Indian asset classes. One of the major chunks comprises real estate investment in India. Most NRIs prefer investing in the real estate market of India due to the huge amounts of profit. Additionally, with the depreciating rupee exchange value, buyers benefit greatly. The real estate market of India is slowly reviving after the pandemic and is moving forward towards better efficiency, transparency and accountability. For more advice you may contact residential property dealers in Gurgaon.
If you are an NRI looking to invest in Indian Real Estate, here are some useful tips you can follow:
1. The Power of Attorney
NRIs need the Power of Attorney (POA) when they are not physically present in India for any type of trade or execution of property transactions. POA allows another person to act on behalf of the NRI. The responsibility of the real estate is delegated, and therefore POA allows the NRI to manage their assets in India efficiently.
The Indian government is planning to introduce a new law to make registration mandatory for these types of deals. Therefore, it will prevent any cases of fraud, stamp duty evasion and disputes when buying 4BHK luxury apartments in Gurgaon.
2. Various types of properties
All the non-residents of India are allowed to purchase numerous properties, which include both residential and commercial. However, NRI cannot own any type of agricultural land, plantation property, or house unless they inherit it or the property is gifted.
3. Tax Benefits
Like most the other countries, India also has a double taxation avoidance agreement with more than 90 plus countries. So an NRI can claim tax credits on taxes paid by him while investing in India. This tax is charged on the money earned from the immovable property in his country of residence. The NRI Homebuyers also need to pay the tax on the amount of capital gains arising in India.
So if he owns a real estate property in India for more than 24 months, it is considered a long term capital asset. Therefore, they will be getting an indexation benefit at 20% of the amount.
The Income Tax Act also allows a certain percentage of tax deduction under Section 80C to 80 TTA, and NRIs can use them to reduce their overall tax burden.
4. Regulations that have to be considered
The Foreign Exchange Management Act (FEMA) is responsible for monitoring and managing all the real estate transactions in India for the NRIs. Recently, the Reserve Bank of India has cut back on rules and limitations. Now according to the new rules, NRIs having an Indian passport does not need any approval when they are investing in the Indian real estate market. Under the general permission category, all persons of Indian origin do not require any approval unless they are registered citizens of a nearby country.
Additionally, there are certain differences in tax for self-occupied and leased out properties. So an NRI needs to learn the details and study them correctly before investing in the property.
The payment can be made through inward remittance, non-resident ordinary rupee accounts (NRO) or foreign currency non-resident deposit accounts (FCNR) and non-resident rupee accounts (NRE). However, when an NRI invests in real estate in India, they have to pay the stamp duty charges, service tax and registration charges as per the Indian laws.
5. Use of RERA
The Government of India has recently introduced the Real Estate Regulation and Development Act (RERA). Now both NRIs and Indian residents are protected from offences and false promises of the builders. So when NRI invests in RERA registered properties, they can rest assure that the property will be delivered on time, they will receive regular updates on the property and get all the amenities and facilities as promised before.
The Indian government and RBI, have introduced certain guidelines and offers tips for NRIs to know before investing in Indian real estate.
Final Verdict
India is one of the fastest-growing real estate markets in the whole world. The market is considered an ideal choice as it has the capability to withstand any type of pressure and even sustain a recession. If you are an NRI looking to buy property in Gurgaon, then you need to get in touch with the YHATAW Real Estate. They are a popular registered real estate broker. The real estate experts at YHATAW will help you find the best projects and properties in Gurgaon on which you can invest. For more help another details you may visit www.yhataw.com.