• Eligibility Criteria
  • NRI Definition: An NRI is an Indian citizen who resides outside India for employment, business, or other purposes, indicating an intention to stay abroad for an indefinite period. This also includes individuals of Indian origin who are citizens of other countries.
  • Property Ownership: NRIs are allowed to purchase residential or commercial properties in India. However, agricultural land, plantation property, or farmhouses are restricted unless inherited or gifted.
• Regulatory Compliance
  • FEMA Regulations: The Foreign Exchange Management Act (FEMA) governs NRI investments in Indian real estate. Compliance with FEMA is mandatory for all transactions.
  • RBI Guidelines: The Reserve Bank of India (RBI) has specific guidelines and regulations for NRIs regarding property purchase, loan eligibility, and repatriation of funds.
• Loan Documentation
  • Identity Proof: Valid passport, visa, and Overseas Citizenship of India (OCI) card if applicable.
  • Income Proof: Employment contract, salary slips, bank statements, and tax returns.
  • Property Documents: Title deed, agreement of sale, and any other relevant property papers.
  • Address Proof: Utility bills, rental agreement, or any government-issued document.

• Power of Attorney (PoA): NRIs may need to appoint a Power of Attorney to complete the property transaction on their behalf. The PoA must be notarized and, in some cases, attested by the Indian consulate in the country of residence.
• KYC Norms: Know Your Customer (KYC) compliance is mandatory, involving verification of identity, address, and financial documents.
• Legal Verification: The property must undergo legal verification to ensure clear title and absence of any legal disputes or encumbrances.

• Repayment Options: Loan repayment can be made through Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts. Funds from these accounts can be used for EMI payments.
• Repatriation of Sale Proceeds: Upon selling the property, NRIs are allowed to repatriate the sale proceeds up to the original amount paid for the property. Any profit earned must comply with RBI regulations and applicable tax laws.

Tax Implications

• Tax Deducted at Source (TDS): When an NRI sells a property, the buyer must deduct TDS at the applicable rate as per the Income Tax Act.
• Capital Gains Tax: NRIs are liable to pay capital gains tax on the sale of property. Long-term and short-term capital gains are taxed differently.
• Double Taxation Avoidance Agreement (DTAA): India has DTAA with several countries to avoid double taxation. NRIs should check if their country of residence has such an agreement with India.

Legal Assistance

To navigate the complexities of NRI real estate transactions, it is advisable to seek legal assistance. At [Your Company Name], we can recommend experienced legal advisors who specialize in NRI property laws and regulations.

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