Benefits for NRIs investing in Indian Real Estate
Non-Resident Indians, especially those from UAE, US, Qatar, Kuwait and Australia seek to pile their disposable income into savings accounts but the best lucrative option for NRIs is to invest in real estate.The Indian real estate market is comparatively more perspective than other industries around the world, especially for the NRI Clients at this hour, as the depreciation of the Indian rupee, makes it cheaper for buyers to invest in luxury apartments ranging from 5-10 Crores, and reforms like the RERA, GST after demonetization has made the real estate market more transparent and favourable for buyers. Further more, NRIs do not require any permission from the Reserve Bank of India to make investments in the Indian real estate and can benefit as much as the local owners residing in India, under the guidelines consolidated by the Foreign Exchange Management Act (FEMA). Source: https://bit.ly/2P8LpnJ
FEMA allows for NRIs to buy or sell immovable property in India, except for agricultural lands,
plantations or farmhouses which can only be acquired as gifts or as an inheritance. Most NRIs own a
property in their homeland for the purpose of visiting and enjoying with friends and family members
and also makes for a secure dwelling after their retirement. Some of the other major benefits of
investing in the India Real estate are listed below; although one should bear in mind that the reasons for investing should be clear before heading out to buy a property. Try to go with ISO Certified and reputed builders to ensure that your remittances flow into the most valuable and quality assets.
Tax Benefits on Rental income and home loan interests:
An extremely favourable clause is the repayment on home loan interests, under Section 80C, deductible up to a maximum of 1.5lakh. The tax on rental income is also deductible, along with the 30% deduction for renovation, maintenance and collection charges, regardless of whether the owner will require the same. Other expenses related directly to the transfer, such as stamp duty and registration charges are also deductibles under Section 80C, subject to maximum deduction of Rs.1.5 lakhs.
To Sell or to Let:
To let out your property means to benefit from it by yielding a good rental income, this, in turn,
can be used to pay off EMI on Home Loans. If you wish to make a profit by selling the property
its best to wait for a period of 3years, before which the profits will be susceptible to Income tax
Laws. If the property purchased is sold after 3 years, it will be considered as long-term capital
gains and comes with an added advantage to avail more benefits.
The reverse mortgage is one of the biggest advantages of investing in a property. It will bring
you benefits in the long run, especially for NRIs who return after their retirement and are met
with expenses whilst their children are abroad. A reverse mortgage is a loan made by a bank to
the homeowner by using his property as a security or collateral. Elderly folk of ages 60 and above
are eligible for this mortgage and is usually receive the amount as a monthly payment for life
or for a period of 15 years.
Even though the real estate industry doesn’t look too promising due to the undergoing crisis, as
adverse effects of recent reforms have crippled developers and homebuyers, there is no better
asset than owning a land or property, as the economic value of these assets, escalates with time
and you are bound to profit from them in the long run. You can also be assured that your
the property will be secured and well maintained by property management companies, such as
RENTPROP4U, that will assist you with tax filings, documentation, tenant screening, and
promotion of your property and even provide you with legal assistance.