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As Modi Government Version 2.0 is in Place, 2019 is the best time for NRI (Non-Resident-Indian) to purchase a lucrative property in South Delhi, India.
Yes, we all agree that there has been price correction for good in South Delhi in the past but current stable property prices along with attractive currency rates is also an ideal factor right now.
Indians living abroad through various real estate investments in various Indian cities is a major factor contributing towards IFR (Indian Forex Reserves).
There have been many significant changes in rules and regulations for NRI’s to invest in Indian Real Estate Sector. The current government has initiated many favorable moves to make the property buying by NRI’s easy to understand and execute.
The NRI’s need to be knowledgeable of several viewpoints, when they buy a real estate in India.
Anybody having an Indian passport can buy in Indian real estate, given that the property is not a plantation property, a farmhouse or agricultural plot.
There is no special permission required for an NRI for buying a property in India but still, there are some important rules and regulations to follow. Payment cannot be made in foreign currency so NRI has to make all the payment in Indian currency only routed through Indian banking institutions. This can be easily done by maintaining a Non-Resident Account under FEMA (Foreign Exchange Management ACT).
There is no limit on number of properties that can be bought by NRI’s either commercial or residential.
Type of Property –
NRIs can purchase all sorts of properties in India other than agricultural land, farmhouse and plantation property. To purchase agricultural land/farm house in India, they have to get permission from the Reserve Bank of India and the government. However, Agricultural/farmhouse properties are permitted only in the case that they are inherited or gifted to the NRI.
Checklist of Documents –
An NRI investing in India needs to have a checklist of items which should include proper property verification, list of all documents, KYC, payment plan, tax implication legalities, and other states to state local formalities and someone trustworthy such as a property lawyer to help expedite the entire buying so that it is continuous and effective.
Power of Attorney –
If an NRI is not able to travel to India physically to make the property purchase during the transaction period, a POA (Power of Attorney) is required so that someone can represent him/her in front of the Sub Registrar to execute decisions on behalf of the NRI. Similarly, POA can be further used in various property matters such as signing and executing lease deeds, home loans, selling the property.
Taxation when NRI Sells a property in India –
When an NRI sells a property in India, TDS (Tax Deducted at Source) calculation is done at the rate of 20.6 percent on long term capital gains and 30.9 percent on short-term capital gains. However, If an NRI has a lower tax slab applicable to him/her, he can always apply for a refund of the TDS by filing their income tax return. If you sell the real estate within a period of three years from the date of purchase, it is termed as short-term capital gain, If you sell the property after three years from the date of purchase then it is termed as Long term gain, However, you always have the option of reducing the long-term capital gains tax by obtaining another property.
Finances and Funding –
If you are planning to take some loan to buy property in Delhi, make sure to at least invest 20 percent from your pocket because as per rule when an NRI is selling a property he/she can only take back 80 percent of the value of the property.
The writer is Founder of SouthDelhiFloors.com
