Can an NRI buy commercial/residential property in India?
Yes, a non-resident Indian can buy either a residential or a commercial property in India.
Is there a restriction on the number of commercial/residential properties owned by NRIs in India?
No, there is no limit on the number of residential or commercial properties that an NRI can purchase in India.
Who governs commercial/residential property transactions by NRIs in India?
The Reserve Bank of India, under the purview of the Foreign Exchange Management Act (FEMA) governs all commercial/residential property transactions done by NRIs in India.
Do NRIs need permission from the RBI to buy commercial/residential property in India?
There is no such need for permission from the RBI to purchase residential or commercial property.
How to fund the purchase?
Payment for the purchase of property can be made either by way of funds remitted to India from abroad through regular banking channels or through the balance in the NRE, NRO or FCNR Account.
If I own two homes, do I have to pay income tax for both?
No, according to the Indian Income Tax Act, one property will be considered as self-occupied and hence you do not have to pay income tax on both.
I own more than one residential property, but none is given on rent. Do I still have to pay income tax for all?
Except for the self-occupied property (only one) you would have to pay taxes for all the other properties whether they are rented out or not. For the non-rented out property you would need to calculate deemed rental income as per income tax rules.
I am an NRI and own only one property globally. It is in India. Do I still have pay tax on it?
No, you do not have to pay income tax on that property.
I am an NRI and own one house in India and one in the country of my residence. Do I have to pay tax on the property in India?
Yes, whether your property in India is rented-out or not, you would still need to pay income tax on the property based on the deemed rental income.
I am an NRI and own a property outside India. I inherited a property in India. Do I have to pay income tax on that?
Yes, even if you have inherited a property in India and that is not your only property, you would have to pay tax on the deemed income.
Is deemed income from house property taxed in foreign countries as well?
To find out if the country of your residence levies deemed income tax on housing property, you need to look at the tax code for that country. In the case of NRIs in the United States, the US tax code does not tax deemed income.
As an NRI, can I avail home loans in India?
Yes, the RBI allows NRIs to take home loans for buying property in India as well as for repair and renovation work.
I am an NRI and have taken a home loan. How do I pay the EMIs on the loan?
You can pay the EMIs in the following ways:
- By remitting the money from your foreign bank account through regular banking channels
- By issuing postdated cheques or Electronic Clearance Service (ECS) from your NRE, NRO or FCNR Account
- Out of the rental income that this property earns
- Cheques issued from your local relative's bank account
Can an NRI give power of attorney for property purchase transactions?
Yes, it is recommended to give a PoA to a person resident in India so that he or she may complete formalities such as registration, possession, execution of agreement of sale etc. A PoA can be given to execute all contracts, deeds, mortgages, lease, sell and all matters relating to managing the property. However, at any given time, it would be better to give a specific power of attorney to any person, restricted only to a single action such as only purchase or only for lease. The power of attorney should be executed on a stamp paper or as per the requirement of the country where the PoA is executed. You must then get the PoA attested by any authorized official of the Indian Embassy/Consulate/Trade commissioner in that country.
As an NRI what if I do not want to give a power of attorney?
Many times, when NRIs purchase properties, developers demand a PoA in their favour. You may choose not to give this PoA but it would lead to delays since all documents would have to be mailed to your foreign address. Giving a specific PoA would be a better option.
