NRI’s are permitted to acquire the immovable property in India through Purchase, Gift, and Inheritance. Following is the guide for the purchase of property in India by an NRI:
1. Restrictions
An NRI must meet the following conditions before buying property in India:
o Can only purchase immovable residential or commercial property in India.
o Cannot buy agricultural land, plantation property, or a farmhouse in India.
o Cannot get agricultural land, plantation property, or a farmhouse in India as gifts.
o As an exception, an NRI can inherit agricultural land, plantation property, a farmhouse, residential or commercial property from a resident of India as per the provisions of the FEMA. Or can receive a residential/commercial property as a gift from a resident of India or another NRI/PIO/OCI.
2. Point of Attorney
An NRI can appoint Power of Attorney (POA) if he is not present in India while purchasing the property. A POA can be any person of NRI’s choice, an acquaintance, a friend or a close relative to complete the transactional procedure for signing the essential documents on his behalf. But the appointment needs to be approved and verified by the Indian Embassy and Indian Government.
3. Tax Implications and Deduction
Any income incurred through rent or after selling the property or if the income earned is above the exemption limit for individuals as per the Income Tax Act is taxable. But if you’re buying immovable property, you don’t have to pay any income tax. You can claim deductions such as standard deductions, municipal taxes paid, and interest and principal repayment on home loan as per the Income Tax Act.
4. Transfer of Immovable Property
An NRI can only transfer Restricted Properties i.e. (a) agricultural land or (b) plantation property or (c) farmhouse property to a person resident in India. And Non-Restricted Property to an NRI or OCI or a person resident in India.
The information provided in this article is generic in nature and for informational purposes only. It is in no manner can act as a substitute for specific advice in your own circumstances. We strongly recommend you to seek professional advice pertaining to your query or doubt or visit the official website of the Ministry of External Affairs https://www.mea.gov.in/property-related-matters-of-nri-oci.htm or Income Tax Department of India https://www.incometaxindia.gov.in/Pages/tax-services/file-income-tax-return.aspx
India is a vast country and a mystery to most. Those who live in it, those who now live outside of India or those who are just visiting. We, at NRIClub™, serve as a centralized hub of information for the residents, non-residents and travellers who are not familiar with various aspects of this great country. We are a unique, online portal providing all of the information to our users that could be relevant to them.
India is a vast country and a mystery to most. Those who live in it, those who now live outside of India or those who are just visiting. We, at NRIClub™, serve as a centralized hub of information for the residents, non-residents and travellers who are not familiar with various aspects of this great country.
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