Besides regulations for the type of properties that NRIs can purchase in India, legal provisions also exist on the mode through which these purchases can be financed
When a non-resident Indian (NRI) opts
to purchase a property in India, there are several regulations that
govern how such a purchase can be financed.
Sources, for financing a real estate investment in India
The money for purchasing a property
in India, has to come through banking channels only. Consequently, the
payment cannot be tendered in the form of traveller’s cheque or foreign
currency. An NRI can also use the money in his/her credit, in
non-resident external (NRE) rupee or non-resident ordinary (NRO) or
foreign currency non-resident (FCNR) account, maintained in India.
NRIs are allowed to purchase property
in India, by availing home loans in Indian rupees, from banks or
housing finance companies. The home loan can also be granted by the
Indian employer of the NRI employee, for the purpose of financing of the
property.
Obtaining a home loan
As NRI investment in Indian real estate
is only allowed in residential or commercial properties, banks too, can
finance only these properties. Almost all banks offer home loans to
NRIs for buying a house or constructing one. One can also get a loan,
for purchase of land (non-agricultural), for constructing a house in
India.
The application for the home loan can be made online,
as well as offline. The nature of documents that need to be submitted,
will depend on whether the NRI is a salaried employee or whether s/he is
self-employed. It will also vary, depending on the NRI’s country of
residence. Nevertheless, copies of one’s passport and visa,
passport-sized photographs and proof of residence in the foreign county,
will be required in all cases.
Depending on whether the NRI is
salaried or self-employed, s/he also has to fulfil a minimum period of
stay in the country of present residence, to avail of the home loan.
Banks may also insist on an acceptable co-applicant, or an NRI
guarantor. The NRI guarantor too, has to submit documents pertaining to
identity proof, address proof and income proof.
Servicing the home loan
EMIs on the home loan can be paid
through remittances from outside India, through a proper banking
channel, or by debiting the NRE, or NRO, or FCNR account. In case the
property is let-out, the rental yields can be used for servicing the NRI
home loan. Money transferred to the NRO account from close relatives,
can also be used for servicing the home loans. In case the property is
purchased for self-occupancy, the NRI can avail of a loan against the
FCNR or NRE account deposits, of up to Rs 1 crore, for servicing the
home loan.
Remittances out of India
An NRI is allowed to repatriate some
of the funds, in case the property so acquired is sold. However, the
number of properties (whether purchased or inherited), for which s/he
can remit or send money to India, is restricted to two. Moreover, the
amount that can be repatriated, cannot exceed the amount (denominated in
foreign currency) received as remittances from outside India, either
for purchase or servicing of the NRI home loan. Under normal
circumstances, an NRI is allowed to remit an amount of USD 1 million in a
year, out of India, from his NRE, NRO, or FCNR accounts, which includes
the amount remitted for sale of a house.
Read all such Property News at CREDAI MCHI – Thane Unit website.
No comments:
Post a Comment