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NRI investment in India real estate is a big decision, especially if you’re an NRI. From legal formalities to financial aspects, there are several things to consider before making a purchase. Here are seven key factors that every Non-Resident Indian (NRI) should keep in mind:
The seven parameters entail the smart decisions for NRIs pertaining to investment in India wherein a proper combination of legalities and financial planning will guarantee a smooth investment journey.
The acquisition of residential and commercial properties by NRIs in India is without any restrictions. However, NRI Investment in India does not permit the direct purchase of agricultural land, farmhouses, or plantation properties unless they are inherited or gifted.
💡Always check the type of property required before making any final commitments.
So property buying is financed by NRIs through:
✔ Their own savings through an NRE or NRO account.
✔ Home loans from banks in India, post eligibility.
✔ Loan repayment must be done in INR through an NRE/NRO/FCNR account.
💡 TIP: Compare loans among other banks for the best offer.
✔ Clear ownership title
✔ Necessary approvals and permits
✔ No pending legal disputes
💡 Hiring a real estate lawyer can help verify documents and prevent legal issues.
NRIs need to know the tax regulations before investing.
TDS: TDS is applicable when property is being sold by an NRI seller and varies with capital gains.
Capital Gains Tax: Long-term capital gains (after 2 years) are taxed at 20% with indexation benefits.
Rental Income: In case of renting out the property, the TDS on the rental income is deducted at 30% before the rent is credited.
💡You may be allowed deductions on home loans and tax exemption under Section 80C and 24(b).
Since NRIs may not always be in India for the work to be executed, they assign a Power of Attorney (PoA) to a trusted person. This helps him or her in:
✔ Property registration.
✔ Managing sale and rentals.
✔ Handling legal formalities.
💡Ensure that the PoA is duly registered and notarized to avoid any misuse.
If an NRI sells property in India and wants to transfer money abroad:
✔ The sale amount must be deposited in an NRO account
✔ Up to $1 million per financial year can be repatriated (after tax compliance)
✔ If the property was bought using an NRE account, funds can be repatriated freely
💡 Tip: Keep records of all transactions to ensure smooth repatriation.
Choosing the right location can lead to better returns and steady rental income. Some of the top cities for NRI real estate investment are:
📍 Gurgaon – A growing IT and commercial hub with high property demand
📍 Mumbai – Offers luxury and mid-range properties with strong appreciation
📍 Bangalore & Hyderabad – Witnessing consistent real estate growth
A reliable real estate company in Gurgaon can assist in finding a property with good growth potential.
💡 Tip: Check for RERA registration to ensure a secure and transparent investment.
If you’re planning to buy a property in 2024 or 2025, understanding the GST on Property is essential. The Goods and Services Tax (GST) applies differently based on the type of property you are purchasing.
✔ Under-Construction Property: 5% GST (without input tax credit)
✔ Affordable Housing: 1% GST (for properties under ₹45 lakh)
✔Ready-to-Move-In Homes: No GST (if the occupancy certificate is issued)
For commercial properties, the GST rate varies depending on the type of business use.
Tip: Always check the builder’s GST compliance before making a purchase. Understanding the GST on Property will help you plan your finances better and avoid unexpected costs.
If you’re unsure about how to invest in real estate in India, we recommend consulting reliable real estate experts like ADXCORP in Gurgaon.
Contact ADXCORP for expert guidance on NRI real estate investments – your trusted consultants in Gurgaon!
Recognized as one of Gurgaon's elite real estate consultants, Ayush Thakur has transformed the cityscape with insightful strategies, unparalleled expertise, and a keen sense of market dynamics. A trusted name in property advisory.
Leading real estate consultant company in Gurugram, India.
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