Is there a boom of overseas Indians who are more interested in buying properties in India and is it getting easier for them?

Ans: Cheer Up!!! The Indian government now
has recognized the demands of the NRI and people of Indian origin
to own piece of property over here in India and over a period
of time what we have seen is that the investment is both for
them to come back and some form of speculation because India
as a market now is giving good returns and the economy is booming
so a lot of people are looking to come back. The rules have
been much simplified and it is become much easier to buy property
for the NRIs.

The new act FEMA (the Foreign Exchange Management Act) that
is a vast difference from the regulation act (FERA) has made a
tremendous difference in acquisition of property and sale of property
and even repatriation of money if one has got property and he
is selling it of. Overall things have improved for NRIs and it
is a great time to be here and invest in Property.

Q2). Can I have the check list in brief that you would
advice a person once I have decided to have a property in India?

Ans: Before buying a property in India, it
is quite essential to know about the property, it’s seller,
and the organizations they are dealing with; to understand what
the problem areas could be or what the grey areas could be and
they must also acquire the property through proper NRI or NRE
account and this can be done in conjunction with the attorney
or dependable real estate agent. It is also highly advisable
to hire a property lawyer because if you are sitting abroad
you will not understand the actual ground rules that are prevalent
here, so if you have somebody whom you can hire and can get
the best advice should be the best way to go.

Q3). Are there any RBI approvals needed to buy property
in India? What are the taxes to be paid? Will I need a PAN number
in India? Or do I have to file any paper work to treasury department
back in the US?

Ans: You would be happy to know that you don’t
require any approvals. The government of India has granted general
permission for an NRI to buy property in India and you have
to pay no taxes even while acquiring property in India but however
certain amount has to be paid if he is selling this property.

You would require a PAN card if you have rented your property
out and you want to repatriate that money but if it is going to
be a sale of property depending on time or the amount of time
you have held the property, the sale proceeds would be subject
to capital gains tax and as of now if you have held the property
for less than 3 years then you would be paying roughly about 30%
tax and if the property has been held for more than 3 years then
it 20% as capital gains tax and that is what he will have to pay.

Q4). Are there any limits on how many properties I can
buy?

Ans: There are limits as of now to residential
properties. If you have bought 2 properties then you cannot
repatriate for more than 2 residential properties if they have
been bought from an NRE account and if the funds have been sent
of a rupee account then the limitation is that you have to hold
the money in the account or in India for 10 years. So the restriction
is 2 residential properties.

Q5). Black Money and White Money? Paying the black component
is kind of an unfair advantage because I am converting my white
money to black. So my question is there any work around in this
kind of situation?

Ans: You’ll notice that most builders in India
want money in two parts – white money by cheque and a black
money which was in form of cash, which is quite normal for most
people out here but somebody coming from abroad where all your
money is accounted for; poses as a problem. Black money component,
yes, it is there. We cannot hide the fact that there is a black
component in the properties that are going in but again things
are changing.

Q6). I hold a green card and am keen to buy a home in
Delhi. I want to know whether there are any taxes that one has
to pay on buying the property and also are these taxes paid
via the builder or would I have to pay them directly, please
explain the tax structure.

Ans: If you purchase any property, you don’t
have to pay any taxes. Taxes are only payable at the time of
repatriation of the money and as I said earlier it will be subject
to a capital gain tax. But at the time of acquiring a property
in India there is no payment of tax and if there are any conversion
rates of the builder may have paid that he builds into the same
price, nothing additional at all.

Q7). I am from USA and my husband and I are planning
to move back from US to India at the end of this year. I want
to know whether returning Indians can retain their property overseas
even after they moved back to India.

Ans: Yes, of course you can. You can retain
properties that you acquired while you were a non resident while
you were staying there you can acquire those properties and
if you acquired those properties you can maintain those and
retain those in these jurisdiction there is no problem or restriction
from the government’s point of view.

Q8). I want to sell my property in Chennai. I just want
to know how I can repatriate these funds from the sales deal
and what formalities are there which are needed to be fulfilled?

Ans: Now depending how you have acquired the
property the repatriation process has to be understood in that
contacts of the property has been acquired from NRE account
then the restriction is that you can only repatriate money for
two residential properties. But if you acquire a property from
a NRO, which is a rupee account, then the restriction is more
with the timeframe. Then you cannot repatriate that money for
ten years. So that is the only restriction if you acquire from
the rupee account and on the payment of taxes you can take your
money back.

Q9). But even if you had NRE account, is there a limit
that you can repatriate only so much in a year?

Ans: Yes, you can only repatriate the amount
that you have spent on acquiring the property. That is the other
limitation that you have through the NRE accounts but hopefully
we are looking at government liberalizing their policies further.

Q10). I have recently inherited some family property
in Jammu. My siblings have now decided to sell it. Again I want
to know how I can repatriate the funds from the sale’s deed.
Any special regulations when it comes to inherited property?

Ans: Yes, the government allows you to repatriate
in a calendar year USD 1 million. So if your inherited property
is worth a million dollars, you can repatriate that money without
a problem. So in that respect there shouldn’t be any problem.

Q11). Lot of NRI’s are buying property, for their parents
or relatives. How does that works, can I gift a property of
any amount?

Ans: Yes, you can gift properties; you can
bequeath properties to you relatives here. To your parents,
you can but them houses. Not an issue.

Photo: Avidipta Housing Complex – 401 Barakhola – Mukundapur – EM Bypass by Biswarup Ganguly, licensed under CC BY-SA 4.0, via Wikimedia Commons.