Before any monetary investment, it is very much important to know about the tax rules. Any non-resident Indian (NRI), who is interested in buying a property in India, should be aware of certain legal provisions pertaining to the purchase or owning of an immovable property in India under the Foreign Exchange Management Act (FEMA). NRIs and persons of Indian origin (PIOs) are treated at par, for the purpose of investment in real estate.<\/p>\n\n\n\t\t\t\t
The Reserve Bank of India, through a circular, has given general permission to NRIs, to purchase any residential or commercial property in India. The investor need not seek any specific permission from the RBI, nor is he required to send any communication or intimation in this regard to the RBI. Under the existing general permissions, an NRI can purchase any number of residential or commercial properties. The income tax laws also allow an NRI to own as many residential or commercial properties as he or she wishes to take.<\/p>\n\n\n\n
In case the NRI is unable to come to India, the documents pertaining to the purchase can be executed by any person, who is given a valid power of attorney. Under the RBI\u2019s general permission, an NRI cannot purchase any agricultural land or plantation property in India. Consequently, under the existing regulations, NRIs cannot purchase farmhouses in India. So, if an NRI wants to purchase a farmhouse or plantation, s\/he will have to approach the RBI for a specific permission and the RBI will consider this on a case-to-case basis.<\/p>\n\n\n\n
An NRI can purchase the property, either as a single owner, or jointly, with any other NRI. However, a resident Indian or a person, who is otherwise not allowed to invest in a property in India, cannot become a joint holder in such property, irrespective of the second holder\u2019s contribution towards the purchase.<\/p>\n\n\n\n
What if a person who owns properties in India, subsequently, becomes an NRI? Such a person can continue to hold the property in his name in India. An NRI is also allowed to continue to own any agricultural land, plantation property, or farmhouse that he owned when he became an NRI, which he is otherwise not allowed to purchase, after becoming an NRI. They are also allowed to let out the property, irrespective of when it was acquired. The rent received from such property, can be remitted, after appropriate Indian taxes have been paid on such rent.<\/p>\n\n\n\n
Likewise, any NRI is allowed to sell, or gift an immovable property to any person resident in India. He or she can also gift or transfer any property, other than agricultural property, farmhouse, or plantation property, to any NRI. It is very necessary to learn each and every clause of investment well. Taking the assistance from a reliable and trustworthy NRI tax service company<\/a> will also help in this matter.<\/p>\n\n\n\n <\/p><\/div>\n\n\n\nShare the knowledge!<\/h3>