India Real Estate Services - buy, sell, rent or lease properties in India

1. Who is a NRI?

2. Can a NRI import gold or silver?

3. Who is a foreign citizen of Indian origin?

4. Can a NRI depositor avail of nomination facility?

5. Can an NRI invest in immovable property?

6. What is the tax benefits for an NRI?

7. What are the tax concessions available to a returning NRI?

8. What facilities are offered to returning Indians?

An NRI is an Indian citizen or a foreign citizen of Indian origin who stays abroad for employment or for carrying on a business or vocation or under circumstances indicating an intention for an uncertain duration of stay abroad. Those who stay abroad for education, medical treatment or on business trips, which do not indicate an intention to remain there for an indefinite period, are not considered as NRIs.

Yes, a NRI can bring upto 10 kg of gold and 100 kg of silver once in 6 months into India as part of their personal baggage provided they have stayed abroad for a continuous period of 6 months. The gold may be brought in any form, except as ornaments studded with stones and pearls.

He will have to pay customs duty in foreign exchange at the rate of Rs 22 per gram of gold and Rs 500 per kg of silver. Both the payment in rupees and the sale amount will have to be routed through his NRI account.

A foreign citizen is deemed to be of Indian origin, if he, at any time, was an Indian citizen or either of his parents or any of his grandparents was a citizen of India. The spouse of an NRI is also treated as an NRI for the purpose of opening and maintaining bank accounts and making investments in shares/ securities in India. Citizens of Pakistan and Bangladesh are not eligible for this status.

For investments in immovable properties, a foreign citizen (but not a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Nepal or Sri Lanka) is deemed to be of Indian origin, if he, at any time, was an Indian citizen, or if his father or paternal grandfather was an Indian citizen.

Yes. Nomination facility is available for all types of NRI accounts. The nominee can either be an NRI or an Indian citizen. Top

Non-resident Indian citizens can freely purchase and sell residential and commercial properties in India. Even foreign citizens of Indian origin do not have to obtain RBI's permission to purchase and sell properties (other than agricultural/ plantation land and farm houses), provided the purchase price is met out of foreign exchange funds. However, they need to submit a declaration to the RBI within 90 days of the purchase. Foreign citizens need to obtain permission for property transactions.

The proceeds of the sale of properties can be repatriated subject to the obtaining of RBI's permission within 90 days of the sale transaction. The amount repatriated cannot be more than the purchase amount made with foreign exchange funds. The properties (which cannot exceed two residential properties and any number of commercial properties) should have been purchased on or after 25th May 1993 by NRIs with foreign exchange funds and sold at least 3 years after their purchase date.

Giving and receiving gifts of properties are freely permitted for Indian citizens. Similarly, a foreign citizen of Indian origin does not need to obtain RBI's permission to acquire or dispose of by gift upto 2 residential properties from or to a relative. However, foreign citizens would need permission to gift properties.

NRIs can freely let out their residential or commercial properties in India. The rental income is freely repatriable from 1996-97, subject to production of form RC1, along with a chartered accountants certificate. The rental income should however be routed through a non-resident ordinary (NRO) account.

Non-resident Indian citizens can also avail of housing loans from banks and housing content institutions for acquisition of one house/ flat, subject to prescribed conditions. At least 25% of the cost of acquisition should be met with foreign exchange funds.

Indian bank deposits are free from wealth tax. Interest earned on NRE, FCNR and NRNR accounts are exempted from Indian income tax

When an NRI permanently returns to India, the interest which he earns on NRE/ FCNR deposits with Indian banks and on government securities and company debentures is eligible for a flat income tax rate of 20%. These investments should have been made out of foreign exchange funds. This concessional tax rate will extend upto the maturity of these investments.

An NRI, on returning to India, may choose to invest the balances in his NRE/ FCNR deposits in RFC accounts. Alternatively, he may convert these accounts into Resident Rupee accounts. His FCNR deposits can also be continued till maturity at the contracted rate of interest.

The income from the Resident Rupee accounts will be taxable from the date of the NRI's return to India. He also has the option of having this income taxed at a flat rate of 20%. In which case, he will not be able to claim any tax deductions.

A returning NRI is allowed to retain the assets, which he has acquired abroad, even after he has returned to India for good. The assets include bank deposits, shares, securities, business and immovable properties. The only requirement is that he should have stayed abroad continuously for at least one year.

He can also open a resident foreign currency account (RFC) with banks in India. If he has returned in less than a year, he needs to obtain the RBI's permission first.