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NRI real estate investment FAQ

5/26/2020 6:08:00 PM

"1.       Who is a NRI? NRI is a citizen of india, who is holding an indian passport and temporarily residing abroad for employment residence, education or any other purpose 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). 2.       Who is a PIO? A Person of indian origin who is a citizen of another country, holds passport of another country  and is not being a citizen of Pakistan,Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan. (a)   He/She at any time, held a Indian passport, or (b)   Self or either parents, grandparents, great grandparents or spouse was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). 3.Who is an OCI? (a) Any person of full age and capacity: (i) Who is a citizen of another country and holds passport of another country but was a citizen of India at the time of, or at any time after, the commencement of the constitution, or (ii) 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                                                                                                                                   (iii) Who is a citizen of another country,and holds passport of another country but belongs to a territory that became part of India after the 15th Day of August, 1947. (iv) Who is a child of such a citizen, or                                                                                                                                    (b) A person, who is minor child of a person mentioned in clause (a) Provided that no person, who is or had been a citizen of Pakistan, Bangladesh shall be eligible for registration as an Overseas Citizen of India. 4.General Documents required for buying property Pan card  OCI/PIO card (In case of OCI/PIO) Passport (In case of NRI) Passport size photographs Address proof 5.Which categories can purchase immovable property in India?   Under the general permission of RBI, the following categories can purchase immovable property in India:                                                                                                                                                                                                a) Non-Resident Indian                                                                                                                                                               b)Person of indian origin                                                                                                                                                             c)Overseas citizenship of india The general permission, however, covers only purchase of residential and commercial property, and not for purchase agricultural land/plantation property/farm house in India, such proposals will require specific approval. 5)Can a NRI/PIO acquire agricultural land/plantation property/farm house in India? Since general permission is not giving permission to NRI/PIO to acquire agricultural land/plantation property/farm house in India, such kind of proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India. 6)What is the Tax treatment for income generated from property selling or renting in india for NRI/ PIO/OCI? The 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. 7). Do NRI/PIO/OCI have to file return in India for rental income from property in india and Capital Gains Tax? The Government of India has granted general permission to NRI/PIO/OCI to buy property in India.These categories do not have to pay tax on mere acquiring property in india, but if they are selling this property, the profit on sale will be subject to capital gains.The gain can be short term capital gain or long term capital gain.If the property held 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 as tax as per the normal slab rates shall be payable and if the property held for more then 3 years then the resultant gain would be long term capital gains subject to 20% tax plus applicable cess.Property Rental income is taxable in India, and they will have to obtain a PAN and file return of income if they rented this property. 8)How does the Double Taxation Avoidance Agreement work in the context of tax on income and Capital Gains tax paid in India by NRI? India has DTAA’s 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 situated. 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 situated in India. 9)How does Double Taxation Avoidance Agreement work in the context of CGT paid in India on the foreign tax treatment? In case the non-resident pays any tax on capital gains arising in India, he would normally be able to obtain a tax credit in respect of the taxes paid in India in the home country, because the income in India would also be included in the country of tax residence. The amount of the tax credit as also the basis of computing the tax credit that can be claimed are specified in the respective country’s DTAA and is also dependent on the laws of the home country where the tax payer is a tax resident. 10)What are the rules governing the repatriation of the proceeds of sale of immovable properties by NRI/PIO as prescribed by the Reserve Bank of India? (a)  If the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels/by debit to NRE/FCNR(B) account, the amount to be repatriated should not exceed the amount paid for the property: (i) In foreign exchange received through normal banking channel or (ii) By debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR(B) account. Repatriation of sale proceeds of residential property purchased by NRI’s/PIO’s out of foreign exchange is restricted to not more than two such properties. Capital gains, if any, may be credited to the NRO account from where the NRI’s/PIO’s may repatriate an amount up to USD one million, per financial year, as discussed below. (b)  If the property was acquired out of Rupee sources, NRI/PIO may remit an amount up to USD one million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance. The NRI/PIO may use this facility to remit capital gains, where the acquisition of the subject property was made by funds sourced by remittance through normal banking channels/by debit to NRE/FCNR(B) account. 11) Is the rental income from acquired property in india is repatriable and what are the RBI rules? Being a current account transaction,a rental income,  is repatriable, subject to the appropriate deduction of tax and the certification thereof by a Chartered Accountant in practice. Repatriation of sale proceeds is subject to certain conditions. The amount of repatriation cannot exceed the amount paid for acquisition of the immovable property in foreign exchange. BrickAcres Real Estate Services Chandigarh ( UT) " Chandigarh

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Pandemic COVID-19 effects and changing market trends

7/3/2020 10:34:00 AM

COVID-19 is spreading across the globe and unfortunately it became dangerous right now. World Economy is facing its worse impact although medicine or vaccine found news give some relief to many of us.While Pharmaceutical companies are finding its medicinal solution, people are busy to take care of themselves by boosting their immune system.Currently health food companies are engaged to advertise their products as immunity booster.In the same way sanitizer,soap,antiseptic liquids,hygiene and sanitation market Segment are on boom mode.Real Estate is one among others which placed itself from the negative economic impact.Very well said "Victory comes from finding opportunities in problems". shelter is an important ingredient of safely and Security. Lockdown made us realized us how home protect us from invisible virus.Many reports claimed rising residential demand.It is pleasure to be a home owner these days, as in Covid-19 days tenants and paying guests faced many problems said news sources.Ownership Title makes us feel Independent and confident and but obvious secure and safe. STAYHOME word is trending in our life right now and it is important for safety prospective. Covid-19 spreading is going to be dangerous simultaneously It has changed people prospective towards life supporting elements of life,Now people demand home with home office,Green Buildings demand is trending these days as it is much capable to reduce impact on physical environment and promote a healthy indoor environment for Residents. The culture of India refers collectively to the thousands of distinct and unique cultures of all religions and communities present in India. India's languages, religions, dance, music, architecture, food and customs differ from place to place within the country. India food and Spices promote health and fitness and COVID-19 days realized this many of us practically and properly.Medicial properties and immunity booster enriched Indian spices are also capable to add mouth watering taste in Indian cuisine. Fast food and junk food addicted indians have no other option but to eat only homemade food these days.In between unavailability of COVID-19 medicine and Vaccine Indian spices and home made stuff are working like life guards against Pandemic.Home Hygiene is the other important thing which we have to do these days. In Pandemic lockdown we spent quality time with our family, and it helped us to reconnect with our loved ones.We had enough time to spend with them.In COVID-19 Lockdown days many good habits we have practiced and we hope it to be continue for lifetime. Chandigarh

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Pandemic Covid-19 Lockdown and buying RERA Projects

7/13/2020 3:23:00 PM

It seems Pandemic Covid-19 will not stop until medicine found and now we have only precautions which will help us to live.It is creating catastrophe globally.Covid-19 and Lockdown have changed people prospective towards their life.Pandemic Covid-19 has succeeded to stressed out on social Infrastructure,Huge health infrastructure is one among other social infrastructure which has vital importance for healthy economy Covid-19 proved practically how citizen's good health bridging the gap between Country's economy and its growth. During the epidemic,people's different faces have been seen, tenants and paying guests were being harassed by Landlords, reports said.Corona spread was becoming dangerous and misconceptions over pandemic and other rental issues were forcing landlords but to evacuate rented accommodation. Where some were doing inhumanity meanwhile, many volunteers came to help others to provide covid 19 safety gadgets and many were came to feed hungry.Animals too were not deprived from humanity. The days of lock down seem worse when the house is not even yours.Pandemic Covid-19 Lockdown forced us to think about our own home,where,we can care our self and our loved one's by giving them hygienic place called home and let our family corona free. Owning Home is everyone dream and Covid-19 spread has been succeeded to convert dream into times need.In india residential demand is on boom and NRI,s real estate demand kept pace in their home town,reports said. Home is a peaceful and secured place, where we feel comfortable and enthusiastic.We can do what we want to do.In your own home, you are the only who can make and break the rule, nobody can instruct you to do this and that,However, EMI's are being paid, if you took home loan,but it will not disturb your mental peace because EMI,s are giving you ownership and once EMI finishes it will become your tangible asset.Means you can enjoy your asset since buying your dream home. Fortunately, RERA and PMAY are two among other are working like demand booster to encourage residential demand, and low interest home loan is working like catalyst into it. RERA empowers buyer,earlier,buyer's property buying decision was hit in the absence of RERA but now seeing in upward trend in residential property it seems RERA has been successful to bring confidence in residential market even in pandemic corona virus lockdown. What is RERA? RERA stands for Real Estate Regulatory Authority.It aimed at protecting the interest of property buyer in real estate sector and to establish an arbitrating mechanism for speedy dispute redressal.Project delivery delays, property pricing, quality of construction, title and other changes are the issues that RERA regulates and addresses in an efficient and transparent manner. RERA empowers both Builder or Developer and Buyer,as most of the things were favoring Builder. RERA brought many norms that will protect buyers from unfair builders malpractices. Takeaways of RERA Standardized Carpet Area Earlier the carpet area on which the property price calculated was not defined.Every builder/developer had their own method of calculation of the carpet area.Means for the same property the builder would calculate the carpet area of 1400 sq ft and the other would calculate the carpet area of 1500 sqft ,Hence there was no parity in carpet area in the absence of RERA.However,this has now been defined by the RERA Act,and the same formula would be applied by all builders/developers for the calculation of the carpet area. Subsequently, it will impact property prices as price calculates on the basis of the property carpet area.Builders compute the price of the property as follows: Cost of the property=Carpet Area x Rate per sq ft Rate of Interest on default Earlier,In case of default on payment by the buyer ,the interest to be paid by the builder to builder was higher on the contrary if builder delays the possession of property ,the interest to be paid by the builder to the buyer was less.Means there was no parity in the interest to be paid for both parties. RERA defines the interest to be paid by both parties will be the same for both parties.RERA has been successful to bridge the gap between two. Reduces the Risk of Builder Insolvency/Bankruptcy Usually A builder has many projects to be built which have to build simultaneously.Earlier,Builders were free to divert the fund raised from Project A to fund the construction of project B. Now,This would not be possible as RERA defines norms which help to reduce the risk of Builder Insolvency .According to RERA,the builder is liable to deposit 70% of the amount realized in for the project in a separate bank account.Builder can withdraw from such account only on the basis of completion of project,which will be certified by a civil engineer,architect and a chartered accountant in practice. Compensation over False Promises RERA empowers buyers,If there is mismatch over builder commitments and actual property,the buyer has an option to withdraw from the property,RERA ,buyer is entitled to full refund of the amount paid as advance or otherwise along with interest and claim compensation. Right to information The buyer will be entitled to have all the information related to the property,layout plan,execution plan,stage wise completion status etc. Chandigarh


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5,500 housing units get delivered in top 7 cities as lockdown eases

7/10/2020 10:07:00 PM

Even as the woes of real estate intensified during the lockdown imposed across the country in view of the Covid-19 pandemic, and the construction activities almost came to a standstill because of the stoppage of work due to the reverse migration of workers, some developers continued to deliver their projects and were even able to launch some new ones amid the ongoing crisis. As per ANAROCK research, the April to June quarter of 2020 &ndash of which most part was under the lockdown &ndash saw new launches of just 4 residential projects &ndash 2 in Bengaluru and one each in Pune and Kolkata. However, one major positive outcome of the minimal new launches in the top 7 cities in the quarter was that developers were able to shed their previous unsold stock by as much as 5% in a year. Further, ANAROCK data also suggests that the top 7 cities saw delivery of as many 5,500 units most recently. “These units were at the last leg of their delivery before cities went into lockdown and as soon as we saw relaxations, these have been delivered to the homebuyers. We need to understand that those who have been able to complete their projects and deliver it despite the prevailing challenges are certainly at an advantage, given that demand for ready homes is at its peak. Delivery of projects during the prevailing challenges definitely sends out a positive signal and helps regain homebuyers’ trust also given that the government had extended the delivery timelines by at least six months for developers,” says Anuj Puri, Chairman, ANAROCK Property Consultants. The Gurgaon-based M3M Group is one such developer which claims to have delivered two of its projects — M3M Urbana Retail, and M3M One Key Resiments — this month with a total sales value of Rs 900 crore. Both these projects are located at Sector 67, Golf Course Extension Road, Gurugram. M3M One Key Resiments offers 170 managed studio apartments, having both one and two-bedroom apartments, priced at Rs 13,700 per sq ft. M3M Urbana Retail, on the other hand, already houses prominent brands, including HDFC Bank, Axis Bank, and several F&B and retail outlets. These two projects are part of the sprawling 17-acre master development, M3M Urbana. Talking about the delivery of projects, Pankaj Bansal, Director, M3M Group, said, “We at M3M India are committed to the timely delivery of our projects and the company is on a fast growth track, undeterred by the pandemic. Standing by our commitment, we are proud to state that two of our commercial projects have been delivered this month and are 100% sold.” As per a company spokesperson, this announcement is a testament to the focused approach and timely delivery by the company amidst tough times wherein several real estate projects have been hit hard due to the pandemic. Source: Financial Express Chandigarh

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Four innovations that will define real estate in the new normal

7/11/2020 1:50:00 PM

Technology has been disrupting the real estate space globally. In recent years, India's real estate sector has seen significant advancement in technologies that can improve planning and governance, efficiency in development, operations and overall customer experience. From growing population and urbanisation, to increased regulatory and compliance measures, and more recently the spread of COVID-19, now reverse migration, have all impacted real estate investment, development and operations. At the same time, such macroeconomic developments, coupled with advancements in technologies, are providing a vibrant platform for innovative tech-oriented products and services in the real estate sector. Earlier this year, India's largest real estate services firm, JLL, launched a whitepaper titled 'Technology Led Innovations: Impact on Urban Development and Real Estate' at the PHD Chamber of Commerce and Industry’s Urban Technovation Summit, 2020. The whitepaper elaborates on the impact of technology led innovations on the real estate sector, and the factors that will help create an ecosystem of growth and investment. The cities of tomorrow will be built on technology the usage of data on a digital ecosystem is going to change cities and position them better in this competitive world. Technology and innovation during implementation of urban scale projects will drive investments and we at JLL are working towards establishing this to major cities and development projects we deal with. Technology led innovation or technovation in the realty sector can be structured under four pillars - Ecosystem Led Technovation, Services Led Technovation, Space Led Technovation and Product Led Technovation. At the macro level, Ecosystem Led Technovation will enable technology to build smarter cities that can help improve efficiency, sustainability and liveability, while also creating a transparent and competitive business environment. Technology solutions can help improve the ‘smart quotient’ of the city by involving stakeholders like the government, investors the citizens, and leave a lasting positive impact on the environment. Technology plays a key role in the planned as well as future projects of the envisaged smart cities. Cities such as Bhubaneswar, Indore and Pune have focused on smart projects such as the Command Control Centre (CCC). Pune has allocated Rs 154 crore for Integrated Command and Control Centre (ICCC) which oversees 200 Wi-Fi hotspots and over 80 environmental and flood sensors along with public address system and traffic surveillance system. These innovative uses of technology help make these cities smarter and safer. With adoption of tech tools for administrative processes, city congestion will reduce, make cities safer for all stakeholders and enhance quality of life, all of which will drive investments and increase resources for governments that can be utilised on other initiatives. Several cities in India have adopted projects of high impact such as Citizen Response Management Systems (CRMS), smart and integrated public transportation systems, city-wide surveillance systems, smart homes, digitisation of municipal operations, etc., JLL was involved in Smart City Proposals (SCP) for 8 of these cities, which include Bhubaneswar, Chennai, Puducherry, Tiruchirappalli, Aligarh, Moradabad, Amritsar and Vadodara. JLL is also presently working as Project Management Consultants for Trivandrum, Kanpur, Dehradun and Moradabad Smart Cities in successfully implementing the identified projects. Services Led Technovation elaborates on the impact of proptech across the real estate lifecycle in a more efficient and effective way.Digital brokerages have already become a starting point for property searches. More recently, developers are increasingly adopting new and advanced construction technology and methods to save time and improve employee safety, using AI and VR to create avenues for more accurate forecasting, and incorporating various technological tools in retail malls and commercial sector for better user experience. While the housing sector has been relatively slower in adopting technology, COVID-19 has seen rapid investment in technology and automation by leading real estate developers. Moving forward, newer prop-tech services spanning data management, real estate investments, and building operations are finding increased adoption with organised industry players. Space Led Innovations, on the other hand is about developing and operating smart buildings primarily through IoT. Wearable technologies help prevent potential issues during project construction and operations. 3D printing can help up-skill the workforce in the construction industry, whilst reducing construction costs. Finally, increasing focus on sustainability, well-being, has provided various sensors-based technologies that help building managers and occupiers strive for predictive maintenance. The office sector continues to be a pioneer in incorporating technology for a more efficient and sustainable workplace. For instance, as employees start to return to the office, workplace apps will continue to evolve to encompass new features focusing on emerging trends on health and safety. Product Led Technovation like drones will continue to see exponential growth, especially as a tool for data capturing, processing, monitoring and delivering better experience. From real estate agents using drones for site walkthroughs, to planners using the product for surveys and site managers using it to improve employee safety, Drones have found utilisation across the real estate lifecycle. Urban planning and real estate sector will observe the expansion of various disruptive technologies in India, including 3D printing, blockchain and drones, with a possibility to scale to smaller cities. Backed by new normal, post-COVID scenarios, emergence of the middle class and millennials, improved consumers’ technology sophistication, global black swan events, as well as government support, real estate technologies in India are poised to thrive. Source: Chandigarh

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As public sector banks slash home loan rates, borrowers with housing finance companies are keen to shift their accounts

7/14/2020 11:55:00 PM

Home loan borrowers with housing finance companies (HFCs) and non-banking lenders are a worried lot. With most public sector banks (PSBs) and a few private sector players reducing home loan interest rate to a 15-year low, their attempt to switch their loans to institutions offering lower interest rates is making little headway. While home loan transfer from one institution to another to take advantage of lower interest is nothing new, the clamour for a shift is getting louder in recent days as many borrowers are undergoing liquidity stress due to the Covid-19 pandemic. With home loan EMIs accounting for a substantial portion of monthly expenditure, any reduction in outgo is a welcome relief to the borrowers. According to Shreekant, CGM, Real Estate and Housing Business Unit (REHBU) of State Bank of India, the surge in demand to switch home loans is driven by the trust in public sector lenders and the low interest rates offered by them. Although interest rates of private and government lenders were similar in the past, private banks have not been that aggressive in reducing their lending rates barring few exceptions. “The problems in the portfolio and functioning of some of the HFCs in the previous years have worried the borrowers,” Shreekant said, adding, “Also, interest rates offered by PSBs are at all time low. So a loan at 6.95 per cent with us is any day better than a 9 or 14 per cent loan with HFCs.” Ratan Chaudhary, Head of home loans at, a digital lending marketplace, said whenever there is a change in interest rate regime there will always be a shift because people think the new benchmark is more transparent and cheaper. In October 2019, the RBI mandated that all new, retail floating rate loans have to be linked to external benchmark - repo linked lending rates (RLLR), to make interest rate transmission more transparent and faster. The new repo-linked pricing regime followed by banks has brought stark difference in interest rates. Consequently, multiple cut in repo rates by RBI over the last few quarters has also resulted in steep fall in lending rates of some banks, especially PSBs. However, interest rates of NBFCs / HFCs still benchmarked on their internal cost of funding, deprives their borrowers from immediate benefit of falling interest rates. For instance, floating rate of interest on a home loan up to Rs 30 lakh in Bank of Baroda or Bank of India starts from 6.85 per cent whereas the interest rate for the same loan amount and tenure in PNB Housing or Indiabulls could cost anything upwards of 8.5 per cent. “Normally the cost of funding of HFCs will always be higher than that of PSBs,” Pankaj Bansal, Head, Key Account Management of BankBazaar said, adding, “Secondly, the repo rate is at 4 per cent and even when margins are added, the interest rates offered by PSBs will still be attractive to consumers.” But borrowers are finding it difficult to make the transfer. Social media is flooded with complaints about these institutions not acting on the transfer requests. But the banks and NBFCs claim that they are working with limited staff and the process involves copious paper work and field visits to physically verify the properties. The transfer will inevitably happen. “If I have a home loan for Rs 50 lakh, which I can straight away transfer to a PSB then I can even wait for two months,” Bansal said adding, “because if you calculate 2-2.5 per cent savings on the residual balance of the loan for next 15-20 years, it is still a huge savings from an interest outlay.” Borrowers facing liquidity challenges due to business loss and salary cuts are not only using this opportunity to switch their loans to lower interest rates but also to extend the loan tenure to reduce their monthly EMI burden. “Post covid, if a customer’s loan is eligible to be taken over by a bank, then he can get his tenure extended if the bank permits,”’s Chaudhary said, adding, “so he will not only get lower interest rate but his EMI will also come down by getting the tenure of the new loan extended.” “In takeover loans, if the outstanding has come down, the value of the property has appreciated and if the borrower or bank is in possession of the title deed then we can also give a top up loan for improving their cash flow,” SBI’s Shreekant said, adding, “That is also one of the reason for the uptick in takeover from other banks.” Chandigarh