Real estate in India has been an opportunistic market for Non-resident Indians for the past few years now mainly because of the government regulations made for the industry known as the Real Estate Regulations Act (RERA) and the Benami Property Act that has brought transparency of work and more trust in investing.
NRI real estate investment involves a lot of procedures and some of the things that an NRI must know before deciding anything are
1. Necessary Documentation:
If you are looking into entering the Indian real estate market, then you must prioritize getting yourself a Permanent Account Number or PAN card which acts as your identity proof in legalizing your investments and transactions that determine your ownership of a property. You must also have your passport and address proof.
2. Foreign Exchange Management Act:
Rules to invest in the real estate sector of India, the Reserve Bank of India has made the rules much easier. Amongst these rules, the most important one is to understand that all the NRI transactions made for real estate come under the Foreign Exchange Management Act or FEMA. This is a governing body that states that any NRI or PIO can purchase property in India apart from agricultural land.
3. Power Of Attorney (POA):
Since you are planning of handling big transactions from outside the country, you must have a power of attorney to represent you in the country so that they can protect your investments from any unknown threats or frauds. There is a procedure for appointing a power of attorney that happens under the supervision of the Indian Embassy. The registration time for completing the process is within 3 months of execution.
4. Money Repatriation:
Once you obey the rules of the Foreign Exchange Management Act, you can repatriate the investments after the sale of the property in India. However, the amount of repatriation cannot exceed the principal amount which was invested. There also is a limit to the repatriation of the money which is a maximum of 2 residential properties.
5. Tax Rules:
You can have the tax benefits of any Indian City, like a deduction of INR. 1 Lakh as per section 80C of the Income Tax Act. However, you must pay the withholding TDS amount at the rate of 1% on any property which is bought above the price of INR. 50 Lakh. There is no Tax in case of the property being used for self. However, the rental income tax is payable.
Real estate investment in Hyderabad has been highly demanded by the NRI recently because of the progress in the city. In case you want to have some of the best returns on your investment in residential properties in the future, now is the best time to look for properties in Hyderabad.