If you are a Non-Resident Indian (NRI) aiming to make an investment in the real estate sector of India, one of the most important requirements is to understand the financial landscape. The financial environment in the country is a highly important enabler in investments, and it is both a constantly relevant and dynamic factor for investment. If you are an NRI or know anyone who is aiming to invest in the real estate sector of India, here are a few things you could do quite well to keep in mind when you start planning.
If you are an NRI and keenly want to make an investment in Indian property then here are some points which you need to keep in mind:
You must know when you are allowed to invest
NRIs are not allowed to buy agricultural, plantation property and a farmhouse. If such types of properties are inherited or gifted to a non-resident, then only they can have it. An NRI can only own commercial, residential, and industrial type of properties in India. Whenever they make their mind to buy, they need to have proper proof of being an NRI which includes an affidavit; they will also require an Indian Passport or a PAN number.
You must know the EMIs and the forex effect
The Reserve Bank of India (RBI) permits NRIs to get loans up to 80 percent of the value of a property. However, these loans will be dispensed in Rupees and consequently, they will have to be paid back in a similar currency. If you plan to pay the equated monthly installments (EMIs) with your own profit-earning in abroad, be cautious about the impact of foreign exchange (forex) as fluctuations can expand the burden. If possible, ensure that a significant piece of the loan will be paid from rental income from a property.
You must know about the tax benefits
For Non-Resident Indian the whole income that is earned or received in India is only taxable in India. However, you are not required to have to pay income tax in India on the money, which is earned outside the country. They can easily claim Rs. 1 lakh deduction under section 80C of Income Tax Act, 1961.
You must know how to file IT returns in India
If you buy a property in this particular country, you are required to pay property tax in India along with stamp duty and registration fees for the same property. So, assess all the costs before you make a proper plan of investment. If you earn money via rent in India, it would directly subject to income tax. Hence, you can hire the services of an accountant to file IT returns for you, and for paperwork. You can also get a PAN card before making an investment, to ease financial procedures later.
You must know about the Power of attorney
If you are buying a property that is under construction in India then you are required to give your developer or a trusted associate power of attorney for the same. It’s your duty to make sure that you have a lawyer’s help to word it appropriately so that your hurdles are reduced while the property is being constructed.
If you are preparing to invest in real estate in Punjab, then Punjab NRI property helps you to choose the best property with the full documentation. We help you to understand the government working mechanism to make this process easier, there are hardly any obstacles in the way of making your dream home a reality.