Conditions to Buy or Sell a Business or Property in India for NRI

The government of India has eased the rules for investment to get more NRIs to invest in India. For their part, the NRIs are eager to invest in India to strengthen and grow their wealth. The new real estate rules have eased the restrictions for investment. Anyone with an Indian passport can invest in real estate property in India.

Terms of buying property

Let us see what the relevant provisions are for the NRI to buy immovable property in India. You do not have to take permission for Purchase and Sale of Property in India as per the rules of the Reserve Bank of India. All the transactions in the real estate sector come under the Foreign Exchange Management Act (FEMA). According to this, the NRI can invest in any number of properties if he wants to. The only restriction is that he cannot buy agricultural property, farmhouse, or plantation property. The NRI can only own such property if it remains gifted to them or they inherit them.

For the Purchase and Sale of Business for NRI the home loan remains secured by a mortgage on the property that he wishes to buy. The lenders can also use any other form of security to secure the loan. When the NRI buys a property in India, they will calculate the tax deducted at source (TDS) at the rate of 20.6% for long-term capital gains and 30.9% for short-term capital gains. The final tax rate is the same for the resident Indian and the NRI. If the NRI finds that he is eligible for a lower tax slab he can apply for a refund by filing his income tax return.

Repatriation of sale proceeds

Once the NRI has availed of the home loan to buy a property, he may not repatriate the entire sale proceeds as there are a few restrictions. The NRI can buy any number of properties and keep them. But, he may only remit the proceeds from the sale of any two properties alone. Another condition is that he can repatriate only those proceeds that he paid for in foreign currency. He could have done so by sending money to India from abroad. Or, he could have used the money that he had in his NRE account. But, when he does so, he must limit the remittance to the foreign currency equal amount. The Foreign Investment Consultant in Delhi gives you the best advice in this regard.

Making down payments

This amount is inclusive of the down payments as well as amounts used for servicing the house loans. The NRI has permission to sell the property at any time as there is no lock-in period for the property. To this, he may add an amount of 1 million USD through the NRO account. So, we see that home loans remain available for NRI and resident Indians along with people of Indian origin.

In case he inherits the property from a resident Indian, the NRI must show the documents for the same. He also needs to produce a certificate from an authorized chartered accountant.