NRIs or Non-Resident Indians are Indian citizens who have been living outside of the country (or have lived outside the country for at least 182 days of a single fiscal year). However, as an NRI, one can still own property in India for a gamut of reasons, ranging from financial security, a rent yielding asset, or personal use for when they are in the country.

As the Real Estate industry is in a boom following the 2020 Pandemic, NRIs are keener on investing in property in India, so we’ve put together a guide to assist you in your endeavours.

1. Permissions

The Reserve Bank of India (RBI) issued general permission to NRIs to purchase land in India for residential or commercial use without any restrictions or limitations, however, NRIs are not permitted to purchase agricultural land, farmhouses, or plantation land without prior approval from the RBI. Anything else, whether it’s a spacious 2 BHK in Thane or a luxurious 3 BHK apartment in Mumbai, you may do as you please, as is your right as an Indian citizen.

2. Ownership of Property

As per the Foreign Exchange Management Act (FEMA) and the RBI, an NRI is eligible to purchase any residential or commercial property in India as the sole owner of the property or have joint ownership with an Indian citizen eligible to own property in the country. They are also permitted to finance the home loan for the property in Indian Rupees, making the prospective of home ownership in India far more enticing and affordable than that in most western countries. An NRI may find luxury apartments in Mumbai significantly more affordable than investing in luxury apartments in their city or country of residence due to the higher cost of living and subsequently the cost of maintenance and investment as a whole.

3. Power of Attorney (POA)

As per the Registration Act, a buyer and seller of a property need to furnish their signatures on the documents that need to be validated by the registrar of the location where the transaction in question is completed. Therefore, if for any reason an NRI is unable to be present in person to complete the transaction, the Power of Attorney selected needs to be certified by the consulate of the country where the NRI currently resides.

4. Payments and Loans

The purchase of property in India must be completed in Indian Rupees, so an NRI may opt for a Non-Resident Ordinary Account (NRO), a Non- Resident External Account (NRE) or a Foreign Currency Non-Resident Account (FCNR) as per the FEMA. Additionally, in terms of loans, NRIs may apply for home loans with no restrictions on the loan amount they seek, as most banks and Non-Banking Financial Companies are more than willing to extend loans to NRIs but with a glaring caveat. The rate of interest for a loan may be higher for an NRI depending on the loan provider they go through.

5. Taxes and Additional Charges

Should you wish to utilise the property as an asset and collect rent on it, you must be informed that any and all income generated in India is subject to taxation, in this case, 30% TDS (Tax Deducted at Source). However, if you own a residential flat in Mumbai and choose to sell the property, the TDS on resale is 20% for long-term capital gains, or the short-term capital gains tax is applicable as per your income tax slab rate.

With regards to additional charges, any property that is purchased will have additional charges irrespective of whether you are an NRI or not, such as stamp duty charges, GST, registration fees, and any specific additional charges that may be applicable to the project itself (such as Clubhouse Membership fees).

All in all, the country has seen an influx of prime real estate projects with top-of-the-line amenities and finishes that make owning a property in India such an exciting idea. The standards of Indian real estate are now rivalling those internationally across the board, whether it’s an affordable home in Dahisar or a luxury home in South Bombay, the offerings are spectacular. Finding a reliable developer with a promising track record of completion is easy when you consider the more seasoned developers operating in the country over generations, such as Dynamix Group currently headed by the 3rd generation, Jayvardhan Goenka.