Fortunately for the NRIs, no special sanction or permission is required to buy property in India. NRIs are also allowed to rent a particular property and send back their rental proceeds to the country they are living in currently. Of course this amount will be subject to payment of taxes.
The real estate sector in India has come a long way from being dominated by a handful of players in the 90s to an expanding base of developers, investors and global stakeholders buoyed by the growing construction industry in the country. The sector has been undergoing corporatisation and professionalism and is recognised as a key sector contributing to the economic development of the country.
(a) He/She at any time has held an Indian passport or
(b) He/She or either of his/her parents or grandparents was a citizen of India by virtue of the constitution of India or Citizenship Act, 1955 (57 of 1995) or
(c) He/She is a spouse of an Indian citizen or of a person referred to in (a) or (b) above.
a) Qualifications - the NRI applicant has to be graduate
b) Current job profile & Past experience
c) Probability of continuing abroad for the loan tenure
d) Probability of servicing the loan with an extended tenure in case you have to return to India.
a.Any immovable property can be purchased by an NRI in India other than any agricultural land, farm house and plantation property.
b. He can get any immovable property as mentioned above by gift from Indian resident, Indian citizen residing outside India or person of Indian origin.
c. Obtain any property by inheritance.
d. He can transfer immovable property to any resident of India by sale.
e. He can transfer any agricultural land, farm house or plantation land to any resident of India by gift.
f. He can also transfer his residential or commercial property by means of gift to any person either residing in India or abroad or person of Indian origin.
Now RBI has also predetermined these norms in home loans for non-residents who are looking forward to buying any property:
1. A maximum of 80 per cent amount is financed by the financial institution. The rest should be given by the NRI.
2. The remittance of the amount for down payment can be done from the place of residence by normal banking channels, i.e., NRO/NRE account in India.
3. The NRI has to repay his principal amount as well as interest part from that similar channel only.
As the amount of income received from such action comes under the head of income from property, therefore, standard deduction is applicable as per the standard slab. In this case, the NRI wil l have to pay the applicable tax if he is residing in the country where worldwide income is taxable unless the country has Double Tax Avoidance Agreement with India.
The special advantage for an NRI is the amount which is paid for the interest of home loan is deductible from NRI's taxable income without any upper limit. The NRI is legally responsible for the payment of capital gains tax as prescribed under the Income Tax Act, in case he sells off the property.