NRI Guide

NRI Guide

Can an NRI buy property in India?

  • Yes.
  • A non-resident Indian can buy either a residential property or a commercial property in India. Further, there is no limit on the number of residential or commercial properties that an NRI can purchase in India.

What is the eligibility for Indian Citizens, Foreign Passport Holder or PIO Card Holders for buying property in India?

  • Persons of Indian Origin and holding an Indian Passport are entitled to buy any property in India.
  • People holding overseas passports, such as British or American, need to apply for a PIO Card (Person of Indian Origin) at the Indian Embassy or consulate in their country of residence, before purchasing property in India.

Do NRI need RBI permission?

  • No. RBI permission is not required to buy residential or commercial property.

How to fund the purchase?

  • Payment for the purchase of property must be in Indian Rupees and made either by way of funds remitted to India from abroad through regular banking channels or through the balance in the NRE, NRO or FCNR Account.

About What an NRI should be aware when purchasing the property in India?

  • It will be wise to get verified the legal papers of a seller by a lawyer before going ahead.
  • Make sure to check the title papers of the property, especially if it is inherited or jointly held, and take a bank release in case it was at any point of time under mortgage.
  • Also take a no dues certificate from the seller at the time of purchase to ensure.
  • For new constructions, land title should be clear and the builder should have taken all approvals and permits from the civic authorities in terms of construction.

Can any NRI avail the home loan benefit in India?

  • Education and profession play a role in deciding your loan eligibility. Like, only Graduate NRI can avail home loan benefit in India.

What income taxes are applicable on house properties in India?

  • According to the Indian Income Tax Act, if a person (resident or NRI) owns more than one house property, only one of them will be deemed as self-occupied. There will be no income tax on a self-occupied property.
  • The other one, whether you rent it out or not, will be deemed to be given on rent. If you have not given the second property on rent, you will have to calculate deemed rental income on the second property (based on certain valuations prescribed by the income tax rules) and pay the tax thereof.

What is the procedure of making payment to purchase the property in India for NRI?

  • According to RBI norms, a maximum of 80% of the value of property can be funded by a financial institution. Rest has to come from the NRI's personal resources. Indian financial institutions give rupee loans and so the same needs to be repaid in rupees only. "Another option NRIs can use is to get funding overseas where interest rates are lower.

How an NRI can repay the finance given by the financial institutions?

  • NRI can pay the EMIs in any one of the following ways:
  • By remitting the money from your foreign bank account through regular banking channels
  • By issuing postdated cheques or Electronic Clearance Service (ECS) from your NRE, NRO or FCNR Account
  • Out of the rental income that this property earns
  • Cheques issued from your local relative's bank account

Can an NRI give power of attorney for property purchase transactions?

  • Yes, in fact experts recommend that you give a POA to a person resident in India so that he or she may complete formalities such as registration, possession, execution of agreement of sale etc.
  • A POA can be given to execute all contracts, deeds, mortgages, lease, sell and all matters relating to managing the property. However, at any given time, it would be better to give a specific power of attorney to any person, restricted only to a single action such as only purchase or only for lease.
  • The power of attorney should be executed on a stamp paper or as per the requirement of the country where the POA is executed. You must then get the POA attested by any authorized official of the Indian Embassy/Consulate/Trade commissioner in that country.

Which Documents needed to be submitted by salaried Non Resident Indian for home loans?

  • Loan application form duly filled and signed
  • Two photographs of both the applicant and the co-applicant with signature on front and back
  • Copy of passport - Along with latest visa stamp and date of entry stamp
  • Proof of residence in India - Electricity bill, Telephone bill, Ration card, Driving License etc
  • Copy of credit card - Last six months bank statements of all the NRE / NRO account in India
  • Last six months bank statements of bank account held abroad where salary is credited - Copy of Contract / Employment Certificate Copy of Annual Salary Certificate specifying the mode of payment (If payment is fully or partly received in cash) Salary Slips for the immediately past 6 months.
  • Documents relating to income/ salary need to be attested as true by the employer
  • Copies of Sanction Letter of Loans availed in India and abroad
  • Self-Declaration of Residential Status
  • All documents in foreign language to be translated in English.

Himalaya Team