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Guidance for NRIs to Invest in Indian Real Estate


Buying a property in India is one of the most important decisions for the Non Resident India (NRI). And the government of India regularly comes up with new schemes to attract more investments from abroad. Indian real estate market gives the best opportunities for the NRIs through which they can deal with a beneficial property investment options.

India has maintained its stability in the economies as compared to other countries, but still has emerged as a gainful destination for investment. It is always advisable to invest in your home country. But before going to the deal in the Indian real estate, the NRIs should know the certain things.

Can an NRI buy property in India? 

Yes, as per the law NRIs can buy either a residential property or a commercial property in India. There is no limit on the number of residential or commercial properties that an NRI can purchase in India. RBI permission is not required in this case to buy residential or commercial property.

However, NRI cannot purchase any kind of agricultural land, plantation land or a farm house in India. He cannot even acquire such property as a gift.

How can NRIs invest in Indian real estate?

First of all NRIs have to decide that where you want to invest. You need to take an Evaluation of each investment option before further into the deal. It is advisable to consider the time limits of investment. NRI need to know each and every fact about the Indian real estate to avoid future troubles.

There are two types of accounts for NRIs that is NRE A/c. stands for Non -Resident External account, it is an account where the foreign currencies are converted into Indian money. The funds in NRE are freely repatriated. And another is NRO A/c. stands for Non Resident Ordinary account, useful when you want to transfer Indian earnings through an account. An NRO account should only contain funds received from within India.

So When NRIs are going to purchase the property in India, payment for the same can be made either by way of funds remitted to India from abroad through regular banking channels or through the balance in the NRE, NRO A/c.

Sources of Finance for NRIs:

There are various financial institutes who provides the finances to the NRIs to invest in Indian real estate as NRIs can pay back the loan amount easily. The repayment of any amount can be done through the NRE and NRO accounts. Maximum 80 percent of the actual purchase price is financed to the NRIs by financial institutes as a home loan. If someone is already getting income in India from sources like rent or dividend, he/she can directly repay the loan as well.

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. The NRI has to repay his principal amount as well as interest part from that similar channel only.

Tax System for NRIs:

A property is also a good tax saving instrument for both residents and non-residents. Fall in the value of Indian rupee in global market has invited higher NRI investments. Locations like Pune, Chennai etc. are some of the premium cities wherein NRIs prefer to invest at present.

An NRI has to pay stamp duty as well as registration fees at the time of purchase. He is entitled to avail all sorts of benefits at par with Indian residents on the interest paid for the home loan. The special benefit 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.

Make a Safe Deal:

While investing into the property, NRIs should go through the proper channels, either through a friend or relative to ensure the legitimacy of property. He can also line of attack through property expos and seminars to choose a right property. It is always advisable to cross check with reliable source to save your investment.


Category : Flatons Advisors Blog



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