NRI GUIDE
Inherent Investment Potential
The real estate in the Indian sub-continent has an obvious potential for growth with the rising population. The discerning investor knows the importance of easy accessibility to schools, hospitals, shops, offices, entertainment centres and airports.
A real estate investment has far higher value in the major towns and cities of India. A wise investment here can benefit from the historic movement of population to urban centres. A process of economic liberalisation has also encouraged NRI investments into real estate with the advantage of repatriation of the capital invested and even the rental proceeds under the circumstances prescribed by RBI.
Returns from real estate have consistently performed well and even out performed the other investment options.
The Wise Investor
All property transactions in India come under a complex web of legislation impinges. A plethora of municipal rules can cause demolition of construction for violations. Income tax rules threaten expropriation for economic offences. Hindu joint family and other succession rules impact on property transfers. Land ceiling legislation affect titles. Neighbourhood groups can hold up construction with lawsuits and objections.
In this jungle of hidden threats and lurking dangers, the best option for the investor is to choose an agency with a proven track record. Past performance in completed projects is the best assurance to the wise investor.
Title Verification
Project documents are normally certified by legal advisors before financial institutions can give loans for flats. They scrutinize original title, encumbrance certificates, building permits, land ceiling clearances and other relevant documents. The buyer-builder agreements should be equitable and should not contain clauses that violate an investor's rights and interests. An investor can employ a legal advisor to examine title for additional protection.
Value Investment
Your apartment has to be assessed not only from the point of utility but also from the point of yields and appreciation as an investment. Desai Flats do have a clear edge in the market over the others in yields and appreciation. An apartment has greater value when the project has adhered to approvals and other sanctions of the various agencies, government authorities. There is as much expertise involved in the construction of apartments as in any other critical production. It needs a builder with integrity and as well as expertise. Your greatest assurance is a good track record. A commitment to quality and aesthetic designs positions Desai above the rest of the market.
Loans
The NRI investor can raise finances from financial institutions to purchase an apartment. The Housing Development and Finance Corporation (HDFC) is the leading institution in India in the field. They have offices all over the country and respond speedily and efficiently. Desai Homes projects are eligible for finance and loan applicants can receive assistance and advice from our offices.
Unaccounted Money
The use of unaccounted money for payments was very prevalent in the real estate field in India. It is superfluous to warn an NRI investor of the dangers of accepting such risks. Even if an investor is not involved, he could be drawn into the problems of his seller. Fortunately, imaginative tax legislation is driving the real estate field away from unaccounted money. Also, computerisation and consequent extensive cross checking by the tax department has made it increasingly difficult to hide financial transactions. In fact, the last recession in India may partly have been caused by the discovery of thousands of individuals that unaccounted money has no safe place in the economy. The population may need time to adjust to the concept that, just like death, taxes are inevitable. In the meanwhile, play it safe.
Who is a non Resident Indian? (NRI)
Non Resident Indian has been defined as a person resident outside India. Person resident outside India under FEMA has been defined as a person who is a non resident India.
Person resident in India:
1. a person residing in India for more than one hundred and eighty two days during the course of the preceding financial year but does not include
2. any person or body corporate registered or incorporated in India,
3. an office, branch or agency in India owned or controlled by a person resident outside India,
4. an office, branch or agency outside India owned or controlled by a person resident in lndia.
Who is a person of Indian Origin?(PIO)
Person of Indian origin means a citizen of any country other than Bangladesh or Pakistan, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan if -
Acquisition of Immovable Property by NRIs/PIOs
Under the general permission to NRIs/PIOs holding foreign passport, the Reserve Bank of India has allowed them to acquire, hold, transfer or dispose off by way of sale or inheritance, immovable properties situated in India. The taxation provisions relating to purchase/sale of immovable property in India by Non-Resident Indians (NRIs) are provided in the Income-Tax Act, 1961.
Consequent on the liberalisation in Exchange Control policy and procedures, the government has brought about major legislative and policy changes to encourage NRI investments in real estate. As per the liberalised policy, transactions permitted without permission of Reserve Bank of India are tabulated hereunder:
NRI |
|
Type of Property |
Acquired from |
---|---|
Any immovable property other than agricultural or plantation or farm house |
Anyone including those residents outside India |
PIO |
|||
Type |
Acquired from |
Mode |
Condition |
---|---|---|---|
Any immovable property other than agricultural or plantation or farm house |
Anyone |
Purchase |
To be met out of funds received in India by inward remittance by normal banking channels. |
Any immovable property other than agricultural or plantation or farm house |
NRI/PIO/Resident from India |
Gift |
|
Any immovable property other than agricultural or plantation or farm house |
NRI/Resident from India |
Inheritance |
The property was acquired in accordance with the foreign exchange laws at the time of acquisition or from a resident in India |
Sale/ Transfer of Immovable Property by NRIs/PIOs
As per the liberalised policy, transactions permitted without permission of Reserve Bank of India are tabulated hereunder:
NRI |
||||
Type of Property |
Mode |
Transferred to |
||
---|---|---|---|---|
Any property |
Sale/transfer/gift |
Resident in India |
||
Any property other than agricultural/plantation/farmhouse |
Sale/transfer/gift |
NRI/PIO |
||
PIO |
||||
Type |
Mode |
Transferred to |
||
Any property other than agricultural/plantation/farmhouse |
Sale |
Resident In India |
||
Agricultural/farmhouse/plantation property in India |
Gift/Sale |
Resident in India who is a citizen of India |
||
Any residential, commercial property in India |
Gift |
NRI, PIO or resident |
Permission to let out Immovable Property
The Reserve Bank of India has also granted general permission to Non-Resident Indian citizens and foreign citizens of Indian origin, to let out their residential properties acquired for their bonafide residential purpose but which on account of their residence abroad, are not required for their immediate residential purpose. The rental income being the current account transaction is freely repatriable outside India.
Remittance of Assets and Repatriation
Remittance of Assets. Upto USD 1 million per calendar year is permitted to be remitted out of the following assets by NRIs / PIOs / foreign nationals including retired, employed and Non resident widows of Indian citizens on production of an undertaking cum certificate in the format prescribed by CBDT (Circular 10 of 2002 dated 9.10.2002).
Person of Indian Origin (PIO) in context to these regulations is defined as an individual
Repatriation of Sale Proceeds.
NRIs / PIOs are permitted to repatriate
Remittance of Current Income
Remittance of current income including rental income. NRIs / PIOs are allowed to repatriate / credit through NRE / FCNR account the current income including rental income subject to deduction of taxes as applicable. (Refer Master Circular Misc. Remittance dated 1.7.2003 - RBI).
Overseas Real Estate
NRIs can now buy immovable properties in any country outside India and retain them even after their return to India for permanent settlement. In addition the amount lying in the Resident Foreign Currency Account (RFC) can also be utilised after their return to India for the subsequent purchase of immovable property abroad.
Investment in Real Estate Development by OCBs
Non-Resident Indians are now permitted to enter into the business of real estate development. This can be done by either forming a partnership firm or investing in a company incorporated in India. The Reserve Bank of India has relaxed certain provisions with regard to investment in Indian companies engaged in housing and real estate development.
Person of Indian nationality/origin resident outside India (NRIs) are permitted to invest upto 100 percent in the new issues of equity shares/convertible debentures of Indian companies engaged/proposing to engage in the following areas:
Disclaimer
Every effort has been made to avoid errors or omissions. Please inform us of any mistake, error or discrepancy. Being matters of vital importance, the reader is requested to cross-check all material at this website with original Government publication or notifications. Please seek professional advice before acting on any information contained herein. The responsibility for obtaining clearances and permissions from the Reserve Bank of India and/or other statutory Authority with respect to the provisions of the above mentioned Act or any other applicable laws rests with you. Desai Homes., expressly disclaim liability to any person, in respect of anything or the consequences of anything done or omitted to be done by any person on the basis of the contents of this website.
Commercial Space: |
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High Quality Shops and Office Space Available - For Rent / Lease |
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Area: |
200 Sq.ft to 11,000 Sq.ft |
Location: |
1) Kaloor |