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View postsBuying property in India is one of the greatest dreams for an India, no matter what part of the world they live in. The Indian diaspora has been considerably interested in investing in the realty sector in India. Over the years, Indian laws have made it easier for NRIs to invest in Indian properties. Governed by The Reserve Bank, all of the transactions come under the purview of FEMA or the Foreign Exchange Management Act.
An NRI can choose from a wide range of options in residential or commercial properties in India. But they should be aware of certain legal provisions involving the purchase or ownership of immovable property in India.
According to FEMA, or the Foreign Exchange Management Act, an NRI is defined as a person who resides outside India and is
PIO indicates any citizen of any country, except Pakistan or Bangladesh, under the following conditions
Buying property in India as NRI is possible. They can either buy a residential property or a commercial property in India. There is no limit on the number of residential and commercial properties that an NRI can purchase.
But there is one exception under the Reserve Bank of India (RBI) regulation, which is that an NRI cannot buy any agricultural land or plantation property in India. An NRI is also not allowed to buy a farmhouse in India. However, there is no restriction in the case of inheritance of such property.
The Reserve Bank of India (RBI) has issued a circular that permits NRIs to purchase certain immovable properties in India. The investors do not need to obtain special permission from RBI, in the case of residential or commercial properties.
But to purchase any agricultural land, farmhouse, or plantation property, they have to take special permission from the RBI.
A circular by the RBI permits NRIs to purchase two types of properties in India
In this case, the investor does not need to inform the RBI about such purchases, even after the transaction has concluded.
However, they are exempted from purchasing three types of properties, namely,
Yes. A non-resident Indian can continue to own any agricultural land, farmhouse, or plantation property in India that he owned when he became an NRI, which he is otherwise not possible to purchase, after becoming an NRI.
When an NRI purchases the permitted property, its payment can be made in two ways
NRIs are required to submit three additional documents such as,
Note: POA is required because the borrower is not based in India
An NRI can own a property in India in two ways
Note: A person resident in India or a person who is not allowed to invest in Indian property cannot become a joint owner of such a property, irrespective of the authorized user’s contribution towards the investment.
a.) stamp duty
b.) registration fees,
c.) post-purchase annual property tax
d.) GST (in case of a property that is under construction)
Thus, it is very clear that buying a residential or commercial property in India by NRIs is not a very tedious task, as long as one is willing to pay for it or eligible to get a home loan.
An NRI can buy a property in India, either singly or in joint ownership with another NRI. However, a person resident in India or a person who is not allowed to invest in Indian property cannot become a joint owner of such a property, irrespective of the authorized user’s contribution towards the investment.
According to rule 114C, an NRI or a PIO doesn’t need to have an Adhaar Card for selling or buying his or her property in India.
When a property in India is sold by the NRI owner, the buyer is liable to deduct 20% TDS. If the property is sold before 2 years (reduced from the purchase date) a 30% TDS shall be applicable in that case.
Foreigners, that is people who are of non-Indian origin are not allowed to acquire any immovable property in India. They can only do so if such property is acquired by inheritance from someone who was an Indian resident.
There is no limit on the number of residential and commercial property that an NRI can purchase.
The eligibility is the same for Indian residents as well as NRIs
No, NRIs don’t require consent from the RBI to buy immovable property in India. This is applicable only in the case of residential or commercial properties. If an NRI wishes to purchase agricultural land, plantation property or farmhouse in India, they have to take special permission from RBI.