Purchasing a property in India is no easy task, well to be fair it isn’t easier anywhere else but it’s increasingly tougher in India because of slow judiciary system and heaps of paperwork that you must follow.
Here are a few tips for NRIs:
Get a Pan card before starting
It is mandatory to have an Indian Permanent Account Number (PAN) as it is needed for all the taxation purpose. Along with that, the investor needs to have Non-resident external (NRE) account which is preferred method to transfer money to India. The investment will be done via your NRE or non-resident ordinary NRO account.
Buy a ready property
Many builders provide discounts and offer low prices when the construction begins to raise as much money as possible. And if by some mishap the projects get delayed, it leaves the buyer paying huge installments on their loan and get late returns. That’s why, it’s better to buy a property that is ready and available for sale, you can negotiate the price using your skills.
Beware of the web
Developers woo NRIs and other investors through digital media, but don’t go according to their information and pictures, because what most of them do is to post pictures of some other buildings, or pictures made by software. So, book after checking it physically, if that’s not possible, ask help from a relative or NRI property management service provider.
After purchasing a property in India, NRIs who sell them three years after the date of purchase are liable to pay a long-term capital gains tax of 20 per cent. It’s 30 per cent, if an NRI sells it before three years.
As an NRI or foreign investor, one cannot buy agricultural land, or farmhouse.
Rent incurs tax too
Income generated from rent is taxable in India, so, one must be aware of this fact too.