Dear NRI Investor,
Investing in real estate back home in India will be one of the finest investment decisions you will make this year. The real estate landscape in India is changing quickly, the cities you left behind are getting those amazing facelifts you may have never imagined possible. Thanks to infrastructural investments by Governments at the central and state levels, citizens have started realizing the potential of investing in homes.
NRIs will contribute 12% to the Indian real estate sector by 2023 and will have contributed $15 billion in 2022. Currently, the market size of Indian Real estate which is US $200 billion is expected to grow to US $1 trillion by 2025 and will be 13% of the country's GDP.
Sincerly,
Varun Manian
Managing Director – Radiance Realty
Successful projects in Chennai, Coimbatore, Madurai, Bengaluru & Dubai:
Choicest Locations: Radiance projects are known for their handpicked, prime residential locations surrounded by everyday conveniences. They are also known for being landmarks in their respective locations.
Exclusive lifestyle homes: Every Radiance project is a hallmark in unparalleled quality, on-time, delivery, affordable pricing and top-class amenities.
Trustable: Every Radiance project is arrived at only with all proper documentation in place, making us a trusted name in the business.
Handpicked projects meaning, excellent ROI: Radiance projects are excellent ROI all the way, no matter where.
THE RADIANCE ADVANTAGE:
73 YEARS OF EXPERTISE
25+ COMPLETED PROJECTS
12+ ONGOING PROJECTS
6K+ HAPPY FAMILIES
5 million sq. ft. of fine living spaces delivered
6 million sq. ft. of exceptional living spaces in the pipeline
100 acres in plotted development of over 500 plots
The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulation Act, 1973. Every bank and housing finance company follows the RBI guidelines to define an NRI – “An Indian citizen who holds a valid document like an Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is an NRI.”
Broadly categorized, Non-Resident Indians qualifying for NRI housing loans are:
Documents required for Resident Indians and NRIs for getting home loans are different in some respects. Home loans for NRIs are available for construction of new houses/ flats, purchase of old house/ flat addition/ alteration to an existing house and repairs/ renovation etc. NRIs can avail of loans by mortgaging an existing residential property. However, for availing home loans, NRIs have to fulfill certain conditions, according to the provisions of the Income Tax Act. They should have stayed in India for a period of 182 days or more within an assessment year or they should have stayed in India for at least a total of one year or more.
The FDI policy that permits FDI up to 100% from a foreign/ NRI investor under the automatic route has boosted NRI confidence. Banks have attractive NRI housing schemes to accommodate the housing needs of NRIs. From the stables of HFCs, NRI housing finance plans with suitable repayment options are available.
Last but not the least, NRIs should take due care while selecting their home loan provider companies or HFCs. Considering the geographical distances involved, it is significant that loan seekers associate with a proactive and responsive HFC.
The eligibility criterias for NRIs differ from Resident Indians based on a few parameters. The parameters include:
| Age | Qualification | Income | Payment options | Number of dependants |
|---|---|---|---|---|
| The loan applicant has to be 21 years of age. | The NRI loan seeker has to be a graduate. | The loan applicant has to have a minimum monthly income of $ 2,000 (although, this criterion may differ across HFCs). The eligibility is also determined by the stability and continuity of employment or business. | The NRI also has to route his EMI (Equated Monthly Instalment) cheques through his NRE/ NRO account. He cannot make payments from another source such as, his savings account in India. | The eligibility of the applicant is also determined by the number of dependents, assets and liabilities. |
Home loans for an NRI applicant ranges from a minimum of INR. 5 lakhs to a maximum of INR. 1 crore, based on the repayment capacity and the cost of the property, which although is variable by the priorities of the home loan provider. An applicant will be eligible for a maximum of 85% of the cost of the property or the cost of construction as applicable and 75% of the cost of land in case of purchase of land, based on the repayment capacity of the borrower.
However, the eligibility can be enhanced by applying for home loans with a co-applicant who has a separate source of income. Also, the rate of interest for home loans to NRIs is higher than those offered to Resident Indians. The difference is somewhere between 0.25%-0.50%. Some HFCs also have an internally earmarked ‘negative criterion’ for NRI home loans. As such, the NRIs who hail from locations that are marked as being ‘negative’ in the books of HFCs, find it difficult to get a home loan.
The Reserve Bank of India (RBI) has clarified that Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO), purchasing immovable property in India must pay for the acquisition by funds received in India through normal banking channels by way of inward remittance from outside the country.
The NRIs and Resident Indians can also acquire immovable property in India other than agricultural property, plantation or a farmhouse. It has issued certain directives for sanctioning home loans to Non-Resident Indians.
The guidelines provided are:
The repayment option for NRIs is that they can pay through the funds held in any non-resident account maintained in accordance with the provisions of the Foreign Exchange Management Act, 1999, and the regulations made by the RBI from time to time.
Apart from the documents mentioned below, a vital document required while processing any NRI home loan is the ‘Power of Attorney’ (POA). Since the borrower is not based in India, the POA is important because HFCs would need a ‘representative’ ‘in lieu of’ the NRI to deal with if necessary. Although not obligatory, the POA is usually drawn on the NRI’s parents/ wife/ children.
The documents needed for obtaining NRI home loans are:
List of Classified documents for Salaried and Self Employed NRI Applicants:
| Salaried NRI Applicants | Self-Employed NRI Applicants |
|---|---|
| Copy of a valid passport showing visa stamps | Passport copy with valid visa stamps |
| Copy of valid visa/ work permit/ equivalent document supporting the NRI status of the proposed account holder | Brief profile of the applicant and business/ Trade license or an equivalent document |
| Overseas bank A/C for the last 3 months showing salary credits | 6 months overseas bank account statements and NRE/ NRO account |
| Latest contract copy evidencing salary/ salary certificate/wage slips | Computation of income, P&L account and B/Sheet for last 3 years certified by the C.A. / CPA or any other relevant authority as the case may be (or equivalent company accounts) |
Photocopy of PIO Card
If the PIO card is not available, photocopies of any of the following documents:
Before construction on a project can begin, the builder must seek several permissions and approvals from relevant bodies. Without these clearances, the construction attract litigation.
Who is an NRI?
An NRI is any citizen of India who is not residing in India and has resided in India for less than 182 days in the preceding financial year. NRIs have professional or other commitments which require them to live outside India for an indefinite period of time.
Who is a PIO?
A PIO is any citizen not of Pakistan or Bangladesh who has:
Who is an OCI?
An OCI is a person who is a citizen of another country, but also:
Who can purchase property in India?
According to guidelines laid down by the RBI, the following can purchase property in India:
What property can NRIs buy?
The RBI allows NRIs to purchase immovable property in India including:
What documents are required by NRIs purchasing property?
NRIs looking to purchase property in India fall under two categories: salaried individuals and self-employed individuals.
What documents do salaried individuals need?
Salaried NRIs looking to invest and buy real estate in India should have the following documents:
What documents do self-employed individuals need?
NRIs who are self-employed individuals looking to buy real estate in India should have the following documents:
What property documents do NRIs need?
Anybody who wants to make an NRI investment in India should possess the following documents:
Power of Attorney
NRIs who want to buy real estate in India need to appoint a power of attorney who can act on their behalf.
What are the different types of PoA’s?
There are three types of PoA’s for NRI investment in India:
What functions can a PoA perform?
With regard to real estate for NRI investment in India, a PoA can:
Who should file income tax?
NRIs need to file income tax returns for investments if:
What are the steps for granting PoA?
The following steps need to be completed to grant someone PoA status:
What are the guidelines for NRIs applying for a home loan?
If you are an NRI looking to buy real estate in India, loans can be made available. Here are the guidelines to follow for home loans that cater to NRI investment in India:
What documents do NRIs need for a home loan?
Who are exempted from filing income tax?
For those looking to make an NRI investment in India, you will be exempted from filing income tax returns if:
How can NRIs file income tax returns?
There are three ways NRIs can file income tax returns:
How is Capital Gain Tax calculated for NRIs?
For NRI investment in India, some of the assets taxable under CGT include:
What is exempted under CGT?
Some of the assets which don’t fall under CGT include:
What guidelines has the RBI laid down for repatriation of funds?
If the property was bought through foreign exchange sources (through normal banking channels/ NRE debit/FCNR account), then amount repatriated cannot exceed:
How is income from Selling or Renting Property taxed for NRIs?
For NRI investment in India, acquiring the property in itself is not taxable. However, the following are subject to income tax:
Just ask. Get answers.