Investing in the Indian real estate market can be a lucrative opportunity for Non-Resident Indians (NRIs) due to government regulations such as the Real Estate Regulations Act (RERA) and the Benami Property Act, which have enhanced transparency and instilled trust in the sector. If you are considering real estate investment in Hyderabad, there are several essential factors to be aware of:
Before entering the Indian real estate market, NRIs must obtain a Permanent Account Number (PAN) card, which serves as identity proof for legalizing investments and property transactions. Additionally, having a valid passport and address proof is essential.
Foreign Exchange Management Act (FEMA):
All real estate transactions by NRIs come under the purview of the Foreign Exchange Management Act (FEMA). According to FEMA guidelines, NRIs and Persons of Indian Origin (PIOs) are permitted to purchase property in India, with the exception of agricultural land.
Power of Attorney (POA):
Since NRIs may not be physically present for property transactions, appointing a Power of Attorney (POA) is crucial. The appointed POA can represent the NRI’s interests in the country, safeguarding their investments against potential threats or frauds. The POA appointment process is overseen by the Indian Embassy, and completion within 3 months of execution is required.
After adhering to FEMA regulations, NRIs can repatriate their investments following the sale of the property in India. However, the repatriation amount must not exceed the principal amount invested, and there is a maximum limit of repatriation for two residential properties.
NRIs can avail of tax benefits in any Indian city, such as a deduction of INR 1 Lakh under Section 80C of the Income Tax Act. However, they must pay a withholding Tax Deducted at Source (TDS) at a rate of 1% on properties purchased above INR 50 Lakh. No tax is applicable if the property is used for self-residence, but rental income tax is payable.
Hyderabad’s real estate market has recently witnessed high demand from NRIs due to the city’s rapid progress and development. Now is an opportune time to explore residential properties in Hyderabad for potentially attractive returns on investment.
At Urbanyards, we have a successful track record of working with NRI customers for the past five years. We have streamlined the transaction process, making it convenient for NRI investors to purchase properties with us. Our satisfied and growing base of NRI clients speaks to our commitment to providing excellent service to our valued customers.