FAQ – NRI:
- ✜ In terms of FEMA (Foreign Exchange Management Act), different types of accounts maintain by NRI/PIO:
- NRO Account (Non-Resident Ordinary Rupee Account): NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts.
- NRE Account (Non-Resident Rupee Account): NRE account may be in the form of savings, current, recurring or fixed deposit accounts. Such accounts can be opened only by the NRI (as defined under Regulation 2(vi) of Notification No. FEMA 5/2000-RB dated May 3, 2000)
- FCNR (B) Account (Foreign Currency Non Resident (Bank) Account): FCNR (B) accounts are only in the form of term deposits of 1 to 5 years. Account can be held in any freely convertible currency. The interest rates are stipulated by the Department of Banking Operations and Development, Reserve Bank of India
✜ Rupee Side: The Reason behind NRIs buy house in India:
With the rupee touching all time lows against the dollar, it appears to be a great time for Non Resident Indians (NRIs) to remit funds to India for investment. And for most NRIs, the preferred asset class continues to be real estate. In India property is a good investment right now.
There are several extremely compelling reasons for NRI to invest into residential properties.
- The depreciated rupee presents an ideal situation for smart investment in Indian real estate.
- The procedure has been greatly simplified for encouraging NRI investment in real estate. (Refer Foreign Exchange management (Acquisition and Transfer of Immovable Property in India) Regulations of 2000 and additions to this regulations vide RBI master circular No. 4/2012-13 dated 2/7/2012 applicable for Acquisition and Transfer of Immovable Property by NRI/Persons of Indian Origins.)
- Wonderful offers being floated by the CREDAI (Confederation of Real Estate Developers Association of India) to focus on development of the housing sector by reducing interest rates.
- Tax benefits that are especially applicable for NRIs investing in real estate in India
- The inherent security of real estate investment that is offered by Indian markets.
✜ As per Foreign Exchange Management Act NRI has the permission for the following different benefits from investing in Indian Real Estate:
- Acquire/Transfer immovable property other than agricultural land/plantation property or a farm house by way of purchase subject to the conditions regarding RBI rules mentioned in clause (a) of the Regulation;
- acquire any immovable property other than agricultural land / plantation property / farm house by way of gift from an Indian citizen resident outside India or from a PIO;
- acquire property by inheritance;
✜ NRIs invents in real estate in India:
According to this, an NRI or PIO (Person of Origin) can own both residential as well as commercial properties in India and there is no restriction on the number of properties they can buy. According to RBI norms, a maximum of 80% of the value of properties can be funded by a financial institution. Rest has to come from the NRI’s personal resources.
✜ NRIs investment into commercial properties in India:
Ans. Nonresident can continue to plough huge amount of money into high-ticket commercial properties in the quest for yield. The different kind of commercial properties are available to invest like retails, corporates and office complexes.
Market Research: NRI Benefits
The net office space absorption across the top eight cities – Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad – was up 58% during January–March 2014 as compared to the corresponding period last year. Among the eight cities, Ahmedabad and Delhi-NCR recorded a threefold increase in net fascination during the period over January–March 2013.
By the market research, the prices of the real estate in the words are getting down but in India are booming up over the past five years. As per the guidelines from the RBI (Reserve Bank of India), an overseas Indian cannot buy agricultural land, plantation and farm land in the country. The facts of this reality showing that now NRI can make their investments in India into real estate sectors in more affordable manner. Sarthav Group is an advance service provider in Indian Real Estate and NRIs property management. Sarthav Group provides NRIs well-furnished and sustainable properties for investment, management and related services in India, from the level of comfort of their own home. We are offering entire group of the services for streamlined and successful real estate buying in India.
Real Estate Investment Market 2014:
The 2014 market report notes that the country is one the largest beneficiaries of the capital flows from other regions within Asia. Among other aspects, Ahmedabad city is providing extraordinary and unprecedented returns on the real estate front, and is one of the most exciting INVESTMENT destinations in India today.
Investment Prospects for NRI by Property Type:
Residential – Residential property appreciation in Ahmedabad has been to the tune of 50% over the last three years. The areas currently commanding the highest demand for residential space are South Bopal, Bodakdev, Vastrapur, Nicol, Nava Naroda and New Ranip. Approximately 16 million square feet of built-up residential space has been built in Ahmedabad over the last four years alone. Another 23 million sq. feet is currently under construction, and a further 30 million is proposed in various parts of the city. This amounts to approximately 70 million square feet of residential real estate, of which the Western part of the city will account for 47%, followed by 19% in the Southern part and 17% each in Northern and Eastern parts of Ahmedabad.
Commercial Properties: Ahmedabad has grown tremendously over the past decade. Office space investments have shown amazing growth, with capital values for commercial properties rising by as much as 20-30 percentages in areas such as Prahladnagar, S.G. Highway, Ashram Road and some parts of East Ahmedabad. Approximately 3.5 million square feet of commercial space has come up in the city over the last four years. Another 1.1 million square feet is currently under construction and another 2.5 million square feet will come up in next two to three years. The quality and services of the existing office spaces have risen remarkably in recent times too.