While transfer money to buy property in India, (NRIs) prefer real estate when compared to other asset categories. To attract numerous such investments in the nation, PM of India the Narendra Modi led government had recently made it simpler for NRIs to invest in Indian real estate.
For example, non-repatriable investments of NRIs in India has now recognized as a domestic investment. Moreover, investments in real estate from funds taken from an NRI’s Rupee account in India would also be viewed as a domestic investment.
All the transactions are administered by the RBI, which allows any NRI is having an Indian passport to invest in Indian property, only if they abide by the laws of Income Tax Act and Foreign Exchange Management Act (FEMA).
According to FEMA, an NRI can buy any immovable property other than agricultural land, forest, farm or plantation land.
Apart from making things accessible for NRIs, there are many rules and regulations too that they must follow.
Take a glance at the rules that are set up for the NRI’s to transfer money to buy property in India.
- To buy property, NRIs may use funds in their Non-Resident External (NRE) or Non-Resident Ordinary (NRO) Savings account and a Foreign Currency Non-Resident account (FCNR) in India. NRIs are also allowed to transfer money to India if it is the revenue earned abroad or their personal savings overseas.
- NRIs can remit the money by normal banking channels from their place of residence to India. For example, their NRO or NRE account seen as normal banking channels. But, while transfer money to buy property in India, NRIs should be cautious. If the state of their residence does not have a double taxation avoidance agreement with India, the amount will be taxed in both nations.
- If an NRI is taking a home loan, he is eligible to get 80 percent of the money from the financial institution or the bank. Nonetheless, he will be expected to repay his principal amount and interest rate through the same way. NRIs are entitled to tax deductions on the interest amount. While there are no upper limits on this, they are assumed to pay capital gains tax, if they sell their property assets. NRIs are allowable to take home loans against the cash they have deposited in their FCNR or NRE bank account if it is up to an amount of Rs 1 crore.
- Buy property with funds received from regular banking is simple. For payouts, NRIs need an NRE account, and for depositing and transfer money to buy property in India, NRIs require an NRO account. Moreover, NRIs can also repatriate money from their NRE account to their foreign account after cash is deducted from capital gains tax and income tax payment.
• NRIs can make equated monthly instalment (EMI) payments for their flats or apartments, either through their NRO account or NRE account or FCNR bank account. It can also be done by directly transfer money from abroad.