A Non-Resident Indian’s Guide to Buying Property in India
India is an attractive market in real estate investment for Indians and Non-Resident Indians alike. Also, considering the fact that the Indian diaspora is the largest in the world (with 20 million NRIs), there are many NRIs working overseas who have their families living in India. Due to these factors, many NRIs are willing to invest in Indian real estate. To meet such a demand, The Government of India has made property purchase rules investment friendly. However, before seeking property for purchase, you should read this article and be aware about the conditions:
Type of Property
NRIs can buy both residential and commercial property in India but not agricultural land, farm houses, or plantation properties. However, if an NRI is willing to purchase agricultural land in India, it requires permission from the Reserve Bank of India for doing so. Other than this, an NRI can buy as many properties in India as he/she wishes. However, if an NRI cannot visit India to purchase the property, an individual with valid power of attorney will have to do so in behalf of that NRI.
NRIs can own any number of properties in India as he/she wants to. According to Income Tax Act of India, 1961, there are certain tax deductions available to NRIs while investing in the properties market of India. They can claim tax deductions under Sections 24 and 80C of the Income Act just like any other Indian Citizen.
In case an NRI does not have the required funds on hand to purchase property, he/she can take a home loan through an NRI Account. RBI permits purchase of property by NRIs but requires the transaction to be completed through Indian currency. Furthermore, an NRI is also required to pay 20% of the home loan amount through owned money while the rest can be paid through borrowed money (i.e. Loans). It will require the NRI to open an NRI Saving Account in any bank, that is authorized by RBI to provide such facilities.
Regarding ownership, if an Indian citizen owns a property and then becomes an NRI, he/she continues to own the property in his/her name, and this condition also applies to any agricultural land. Considering that an NRI continues to live outside India, he/she can provide the power of attorney to an Indian citizen for making any property related transaction in India despite not being physically present in India.