Understand NRIs Guidelines to Buy Property in India

Purchasing property in their homeland is not just a sentimental choice for Non-Resident Indians (NRIs), but also a calculated financial one. It also means of maintaining ties to their heritage while adding assets in a market that is expanding quickly.

You must wonder how can an NRI buy a property in India? Here we provide you complete guidance on purchasing real estate in India as an NRI in this blog, covering everything from documentation to complicated regulations of the Indian real estate market.

Types of Properties NRIs Are Permitted to Purchase in India

NRIs are permitted to purchase a variety of properties in India, subject to a number of restrictions:

• Residential Property
• Commercial Property
• Agricultural Land
• Plantation Property

NRIs must familiarize themselves with the laws and regulations of India for getting property ownership and adhere to any limitations imposed by state or local governments on NRI property purchases.

Documentation Needed

The following papers are required of NRIs purchasing real estate in India:

• PAN card
• Aadhaar card
• OCI / PIO Card
• Electricity bills
• Passport
• Salary slips
• Income tax returns
• House loan application

Tax Implications for NRIs Purchasing Real Estate in India

Stamp Duty and Registration Fees: State-specific stamp duty fees and registration fees apply at the time of purchase.

Capital Gains Tax: NRIs must pay short-term capital gains (STCG) according to their income tax bracket and long-term capital gains (LTCG) at 20% with indexation advantages.

Rates of TDS:

• TDS on rent (Section 195), plus relevant cess and surcharge, up to 39%.
• 20% TDS for LTCG if the property is bought from a non-resident.
• If a resident purchases more than ₹50 lakh, there will be 1% TDS.

Follow These NRIs Guidelines to Buy Property in India

1. Find out about the eligibility to own a residential or a commercial property in India but not agricultural land, farmhouses, or plantations.
2. Select the type of property whether you need to purchase industrial, residential, or commercial property, as each type of property has different regulations and documentation.
3. Obtain a PAN Card (Permanent Account Number) for a number of financial transactions in India, including asset purchases.
4. Understand FEMA guidelines as payments must be made in INR via designated bank accounts (NRE, NRO, FCNR).
5. NRIs can opt for home loans, which typically cover 70%-80% of the property value.
6. Hire a real estate consultant that can help navigate legalities and documentation.
7. Research location based on budget, infrastructure, and appreciation potential.
8. Check legal titles and documents to avoid disputes.
9. Obtain a No Objection Certificate from the Income Tax Department when buying from an NRI.
10. Ensure the agreement covers payment terms, timelines, and possession conditions.
11. Register the property with the sub-registrar to transfer ownership.
12. Ensure the property meets safety standards if it’s a new construction.
13. Complete loan disbursements and financial requirements to secure ownership.

In conclusion, with the right information and guidance, the desire to own real estate in India as an NRI may be a lucrative opportunity. By understanding the legal requirements, researching financing options, locations, tax implications, and following recommendations for a hassle-free buying process, you can make informed decisions and safeguard your investment in the Indian real estate market. You can benefit from all the opportunities and possibilities Lucky Developers has to offer. Connect with us today to buy property in India and know more about our real estate developments.