As per India’s Foreign Exchange Management Act (FEMA) 1999, an NRI or Non-Resident Indian is a citizen of India, or a foreign national of Indian-origin, living outside India for employment, business or any other vocation, which would indicate his intention to stay outside India for an indefinite period. An Indian would also be termed as an NRI if his stay in India is less than 182 days during the previous financial year (April-March).
PIO or Person of Indian Origin means an individual (excluding citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal or Bhutan), who at any time held an Indian passport, or who himself/herself or either of his/her parents, or either or any of his/her grandparents were a citizen of India according to the Indian Constitution.
As per India’s Foreign Exchange Management Act (FEMA) 1999, a person resident in India is a person residing in India for more than 182 days during the previous financial year (April-March) and who has come to, or stays in India either for employment, business or for any other vocation.
No, NRIs do not require any consent from any regulatory body to buy residential or commercial properties in India. However, NRIs cannot buy agricultural/ plantation land in India.
There is no limit to the number of properties that NRIs can purchase in India.
Yes, an NRI can buy a property in India in partnership with an Indian citizen/ NRI/ PIO. However, they cannot buy a property in partnership with any foreign citizen.
The housing loan needs to be paid upfront for the entire tenure of the loan, by way of direct remittances from abroad through normal banking channels, or from other financial accounts as may be permitted by RBI.
Generally, payments are done through NRO, NRE, NRNR and FCNR accounts. These allowed accounts may change as per RBI regulations.
According to the Income Tax Act, if any buyer (Indian resident or NRI) owns more than one property, then only one will be assumed as self-occupied. On other properties, income tax will be levied on the rental income (actual or deemed). Hence, if an NRI owns more than one global property, then income tax will be levied on the Indian property, on the rental income of the Indian property (irrespective of whether the property is rented out or not.)
An NRI has to pay capital gain tax on the profit made by selling a property. If a property is held for 3 years or less following the actual possession, then short-term capital gain tax is paid. The gain will be included in the total income & normal slab rates will be applied. However, if the property is held for more than 3 years, then long-term tax rates will be applicable. This will include 20% tax rates plus applicable cess.
No tax benefits are available for NRI’s, unless you file your returns, and subsequently become eligible to avail them.