India is a land of opportunities, a land of growth, and a land where the future is.. Nowadays several property expos happen in major cities across the world showcasing the various properties wherein NRIs can invest their hard earned money. But before you invest in any property do go through the checklist below to ensure that you are not dealing with unscrupulous property dealers.
Checklist before buying property in India
• Property type
• who is the seller
• Documentation required
• Taxation laws
• Power of attorney
• Legal Aid.
NRIs are not allowed to purchase agricultural land, any plantations or farm houses without RBI permission. The only property they can buy is immovable property. Hence, it is paramount that NRIs ensure that if they are buying land, then it is not agricultural land or it will be deemed illegal. The property can be bought only in Indian currency.
Authenticity of the seller
According to the Foreign Exchange Management Act NRIs can buy property only from a seller or a developer recognized by the Government of India. It is the responsibility of the buyer to do a background check on the seller, their past projects, track record in terms of project delivery, legal history and their overall reputations; It is essential that NRIs ensure that the developer or the seller has full and legal ownership on the property and there are no legal disputes involving the property or land.
What are the essential documents that the seller should produce before the sale
All financial transactions in India require the Personal Account Number (PAN) and NRIs too should have a PAN card. It is ideal to have an NRI account in a local bank to ensure smooth financial transactions. This will also ensure that there is transparency in all dealings and there is a proper record of all transactions. If the person holds Indian Passport, then he or she is eligible for an investment in Indian Real Estate.
Any income that NRIs make in India is subject to taxation under the Income Tax Act of India. This is different from the NRIs overseas income. When you rent your property in India, then all NRIs have to pay tax on the rentals they accrue irrespective of the rental value. This is applicable to all who earn any sort of income in India notwithstanding the income slab.
In case of apartment, extra costs like maintenance fee, electricity fees, and water charges property taxes are present. They have to ensure that all payments are up to date.
Power of attorney (PoA)
: As they live outside, NRIs have an option to give PoA to their friends or relatives to complete the property purchase process in India.
It is advisable to seek legal help to ensure that all legal aspects are covered. By just following a few guidelines NRIs interested in investing in India can have a home of their choice in their motherland.