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Non-resident Indians (NRIs) who consider investing in India in real estate can benefit themselves in Tax exemption, Rental income, Retirement benefits etc. So as an NRI, are you confused how to invest in the Indian real estate market? If yes, you’ve landed at the right place. The Indian laws, over the years, have made this an easy job. The Reserve Bank of India governs these transactions and they fall under the apprehension of the Foreign Exchange Management Act (FEMA).
If you have an Indian passport you can easily invest in Indian real estate, given that the property is not an agricultural land, plantation property or a farmhouse. Also, you do not require any prior permission to make a property investment in India. You can invest in any commercial or residential projects and also there is no limit on the number of residential or commercial properties that an NRI can purchase in India. All the transactions should be done in Indian currency through Indian banks. But one of the mandatory things is to have an NRI account in an authorized Indian Bank.
NRIs can also approach the bank for funding, is the paper work is clean , and verified by a lawyer. There are several NRI home loan schemes available under different financial institutions in India. But education qualification and profession plays a major role in deciding your loan eligibility. For instance only graduate NRIs can avail home loans in India. Also, if you are getting your property funded make sure that you have a minimum of 20% of the value of the property to invest from your personal resources. You can take funding for a maximum of 80% of the value of the property as per RBI rules. If you are buying an under-construction property; you will have to give power of attorney to your builder or a trusted associate.
NRIs can consult a lawyer to appropriately file the document so that there is no chance of fraud and the investment is secured while the property is being developed. Payment for the purchase of property can be made either by way of funds remitted to India from abroad through regular banking channels or through the balance in the NREBSE , NRO or FCNR Account. Since all transactions must happen through the Indian banking channel, repayment has to be done by inward remittances. You can directly get the money remitted from NRO/NRE account in India or issue post-dated cheques or Electronic Clearance Service (ECS) from your NRE, NRO or Foreign Currency Non Resident (FCNR) account.