The Indians residing outside the country can also invest in the real estate sector. They are eligible to make investments and remittances. They find the Indian real estate market very lucrative and want to create assets using their income in the foreign land. The government has made some rules that need to be amended before the investment is done from foreign soil.

The depreciating value of Indian money is also working in favor of the NRI investment plans. The Indians residing outside India is gaining well by channelizing foreign currencies and using the exchange rates. The overall result of this investment is working in favor of the real estate sector as well. In addition to this good news, the increased transparency due to the implementation of RERA Act presented escalated confidence in the transactions done by the NRIs.

Things NRIs should know before investment

• Power of Attorney (PoA)

In most of the cases, the NRI investors are unable to be present during the transactions or legal paperwork. The property transactions cannot wait as the legal formalities should be done within the stipulated time. This is where the NRI owners are eligible to offer a PoA to someone. There is a legal way to empower a person by delegating responsibilities. This person is eligible to manage the endorsed assets.

PoA is used to empower a person to carry on the related responsibilities for leasing, selling, mortgaging, renting, borrowing, solving and selling disputes, perform any act that is covered within the span of responsibilities. The government is now planning for the amendment of a law to make the registration for these deals mandatory. This will reduce the fraudulent activities in this segment.

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• Benefits in taxation

India is currently under excellent agreements to avoid taxation with over 90 countries. It means that an NRI residing in any of the countries are eligible to claim tax credits sought by the Government of India on income generated by the immovable properties. The NRI has to pay taxes on the capital gains from the real estate transactions done in India. A property owned for more than two years by an NRI will be considered as a long-term asset and is liable for 20% taxation on the income. Section 80C and Section 80TTA can be used by the NRIs to reduce the tax burdens in India.

• Proper method of transaction

The investment in this sector will not be an issue as the entire platform has transformed to a new level. The implementation of RERA has made the industry much more acceptable for the investors of Indian origin residing in a foreign land. The increased transparency due to the regulatory changes has also increased the confidence in investing hard earned money in this field. The transaction will need documents related to property verification, KYC, tax implication documents, payment plan and all other necessary records. This process has become excellently smooth and easier for the NRI investors.

• Regulation consideration

The NRI investment in the real estate sector falls under Foreign Exchange Management Act (FEMA). Reserve Bank of India (RBI) has simplified these rules to a considerable extent. Only the Indians having citizenship of a different country will need an approval from the authorities.

The transactions will be made from the non-resident rupee accounts. The rest of the rules are similar to that of the normal investment formalities. The NRI investors are eligible to seek loans but they have to pay the amount in Indian currency.

• Property genre

The NRI enthusiasts can buy both commercial and residential properties but they are barred from investing in farmhouse properties, agricultural lands, plantation properties, etc. They can inherit the properties or can get them as a gift.

Final words

The depreciating value of the Indian currency will be a great boost for these ventures. The NRI investors will enjoy an excellent privilege. They will have to file IT returns in the Indian soil. The interested NRIs can check the offers from the developers, banks, and discounts. The income tax and capital tax will have to be paid in India. The loan can range up to 80% of the price of properties from the leading brands. Enjoy the fruits of a well managed investment in the real estate sector of India.