NRI Real Estate Services

The financial security of your family’s future no longer depends only on your current net worth; it depends upon how wisely you plan to invest it in estate planning.

Understanding the importance of estate planning, many NRIs wish to own land or property in India with a vision to come back to their motherland in future. However, this process could be complex for many reasons because even though many provisions are available for the NRIs, there are limitations and complexities attached to them.

 

According to the Foreign Exchange Management Act (FEMA), an NRI is an Indian resident who resides outside India. Everyone who falls under this definition of NRI must understand that FEMA controls the buying and selling of immovable properties by NRIs in India. The act has diluted many Indian foreign exchange laws and made it easier for NRIs to purchase a property in India. 

 

NRIs can purchase certain immovable properties situated in India without specific permission from the Reserve Bank of India (RBI) and even though there is no limit on the number of properties they wish to purchase, there is a big BUT in this scenario- which is the type of properties NRIs can buy. An NRI cannot buy any type of property that he/she wishes to. A Non Resident Indian can only purchase a residential or commercial property in India. Purchase of agricultural or plantation property is not allowed under this law. Even receiving such land as a gift is not permitted. There are only two ways in which it can happen:

  • If you have inherited agricultural or plantation land
  • If you are an NRI who owned a land before going abroad and becoming a Non Resident Indian, then you are allowed to make agricultural use of a particular land. 

 

Another Complexity arises with the mode of payment. The payment of the purchase can only be made through their abroad banking channels, Non-Residential External (NRE) and Non- Resident Ordinary (NRO) or Foreign Currency Non Resident Account. The NRI is also free to buy a property with a home loan in Indian rupees. For the purpose of financing property, it can be granted by the Indian employer of the NRI employee. The loan can be taken against deposits lying in the NRIs FCNR or NRE account upto an amount of Rs. 100 lakhs.  Or it can be serviced out of the rents received from the property. Other modes of payment, such as foreigh currency or cheques are not permitted for the purchase.

 

Talking about the tax laws on properties in India owned by NRIs, it needs a clear study and practical understanding of the law. According to it, an NRI owing more than one house property, then only one will be considered as self-occupied. Rest all will be charged the rental tax. Whether you have rented it out or not, you are entitled to pay the tax. If you have not given the property on rent, the deemed rental amount is calculated and according to that, the taxes are paid. This applies globally, which means that if the NRI owns a house overseas and then purchases a house in India, then he/she has to pay rental tax on the one in India.This is applicable even if the NRIs inherits a house. 

 

This complex process of buying and sleeping property in India not only requires the understanding of Indian laws, but also a clear understanding of the laws of your residential country. You must look at the tax code in the country of your residence. 

 

To understand these many other complexities of the system, Indians settled abroad prefer hiring NRI property services in India. NRI real estate services, such as Entrust make your estate purchase a smooth process and get you a land in your motherland. When you park your money in a real estate business in India, you don’t want to worry about it, which is why we are here to guide you throughout the process- from purchasing the property to managing it for you. 

With us, you know exactly what is happening to your property.

 

Let us take two cases of devolution of property, where the experts advise people on choosing estate planning services.

 

Scenario #1: Gift

Under the definition of Relative in Indian Income Tax Act, there is no limit for a gift given to a person. Anyone can give any asset to a person he/ she wishes to gift. Now, the person who receives the gift has to show the gift as a part of his/ her income of the year. And accordingly, it will also be taxed. Who wants to pay taxes on a gift?

For real estate, there is no gift tax, which makes estate planning a chosen option for many people. It becomes all the more important for high worth NRIs who wish to buy property in India through gifting. Here is where NRI real estate services, like Entrust come into play and offer you a smooth estate planning system.

 

Scenario #2: Will

Another scenario here is the inheritance of a property through a will. If you wish to invest your inherited money into real estate in India, the most experienced NRI real estate investment in Bangalore– Entrist is the right place for you.

 

If you in any such scenario or even if you simply wish to make a property purchase in India, Entrust is here to effectively do it for you.