NRI FAQs
To make the process of buying a property easier for our ever growing NRI customer base, we have compiled a comprehensive set of facts, rules and requirements in one place which makes investing in our properties hassle free.
NRI / PIO / OCI Definition and general guidelines
Non Resident Indian (NRI) is a citizen of India, who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Non-resident foreign citizens of Indian Origin are treated at par with Non Resident Indian (NRIs).
Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
- At any time, held an Indian passport, or
- Whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
- Any person of full age and capacity:
- Who is a citizen of another country, but was a citizen of India at the time of, or at any time after, the commencement of the constitution, or
- Who is a citizen of another country, but was eligible to become a citizen of India at the time of the commencement of the constitution, or
- Who is a citizen of another country, but belongs to a territory that became part of India after the 15th of August, 1947.
- Who is a child of such a citizen, or
- A person, who is minor child of a person mentioned in clause (1)
NRI / PIO / OCI Definition and general guidelines
- PAN card (Permanent account number)
- OCI / PIO card (In case of OCI / PIO)
- Passport (In case of NRI)
- Passport size photographs
- Address proof
Under the general permission granted by RBI, the following categories can freely purchase immovable property in India:
Non-Resident Indian (NRI)- who is a citizen of India residing outside India
Person of Indian Origin (PIO)- who is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
- At any time, held Indian passport or
- Whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
The general permission, however, covers only purchase of residential and commercial property and not for the purchase of agricultural land/plantation property/farmhouse in India. OCIs can purchase immovable property in India except agricultural land/plantation property/farmhouse.
Since general permission is not available to NRI / PIO to acquire agricultural land/plantation property/farm house in India, such proposals will require specific approval from the Reserve Bank and the proposals are considered in consultation with the Government of India.
Tax on income from immovable property selling / renting
The mere acquisition of property does not attract income tax. However, any income accruing from the ownership of it, in the form of rent (if it is let out)/annual value of the house (if is not let out and it is not the only residential property owned by that person in India) and/or capital gains (short term or long term) arising on the sale of this house or part thereof is taxable in the hands of the owner.
The Government of India has granted general permission to NRI / PIO / OCI to buy property in India and they do not have to pay any taxes even while acquiring the property in India. However, taxes have to be paid if they are selling this property. Rental income earned is taxable in India, and they will have to obtain a PAN and file a return of the income if they have rented this property. On sale of the property, the profit on sale shall be subject to capital gains. If they have held the property for less than or equal to 3 years after taking actual possession then the gains would be short term capital gains, which are to be included in their total income and will be taxed in the normal bracket. However, if the property has been held for more than 3 years, then the resulting gain would be labeled as long term capital gains subject to 20% tax and some additional levy (cess)
India has DTAAs with several countries which give a favorable tax treatment in respect of certain heads of income. However, in case of sale of immovable property, the DTAA with most countries provide that the capital gains will be taxed in the country where the immovable property is located. Hence, the non-resident will be subject to tax in India on the capital gains which arise on the sale of immovable property in India. Letting of immovable property in India would be taxed in India under most tax treaties in view of the fact that the property is in India.
Capital Gains Tax on NRI / PIO / OCI
Yes. Long-term and short-term capital gains are taxable in the hands of non-residents.
Type of asset: Assets like house property, land and building, jewelry, development rights, etc.
Rate of tax deduction at source (TDS)
Long term 20.6%
Short term 30.9%
Exemption available (only for long term capital gains)
The long term capital gains arising on sale of a residential house can be invested in buying/constructing another residential house, within the prescribed time. The exemption is restricted to the amount of capital gains or the amount invested in new residential house, whichever is lower. If the amount of capital gains is invested in bonds of National Highways Authority of India (NHAI) or Rural Electrification Corporation, then the entire capital gains is exempted, or the proportionate gain is exempted. As per the financial budget 2007-08, a cap of INR. 50 lakhs has been imposed on investment that can be made in capital tax saving bonds.
In case the non-resident pays any tax on capital gains arising in India, he would normally be able to obtain a tax credit with respect to the taxes paid in India/ home country, because the income in India would also be included in the country of tax residence. The amount of tax credit is also on the basis of computing the tax credit that can be claimed as specified in the respective country’s DTAA and is also dependent on the laws of the home country where the taxpayer is a tax resident.
About Manju Groups Properties
At Manju groups, we take gratification in our uncompromising integrity through the exquisite 22+ years of journey in the excellence of providing unique properties to the right customers. We are working all the time for giving the best real estate investment service and management to the highest calibre.
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- Project 1
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About Manju Groups Properties
At Manju groups, we take gratification in our uncompromising integrity through the exquisite 22+ years of journey in the excellence of providing unique properties to the right customers. We are working all the time for giving the best real estate investment service and management to the highest calibre.
Enquire
Schedule a site visit
Project 1
Project 2
