NRI’S SECTION

Real estate has become the hottest sector in India with everyone discussing about property market as it has played a significant role in the country’s economy. Because of the growth of the Indian economy, the real estate developments has emerged as one of the major revenue generating sectors, which influences the economy. With the increased relevance of India as a preferred business destination, has attracted the NRI potential property buyers in suitable locations to operate in India.

If you are an NRI and wish to invest in properties in Ghaziabad, then the properties by Fragrance Homes are the excellent prospects for you. We are looking forward to serve the NRI’s who have the taste and aspiration to lead a luxurious and comfortable life by delivering luxury lifestyle through innovative solutions.

Who is an NRI?

An Indian Citizen who stays abroad for employment or carrying on business or vocation for other purpose outside India or stays abroad under situations signifying an intention for an uncertain period of stay abroad is a non-resident. (Persons posted in U.N. organizations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian Origin are considered equivalent with non-resident Indian citizens (NRIs) for the motive of certain facilities.

What is a PIO (Person of Indian Origin)?

Under FEM (Foreign Exchange Management) ACT, 1999 and Acquisition & Transfer of Immovable Property in India Regulations, 2000, a foreign citizen is deemed to be of Indian origin, is called Person of Indian Origin (PIO), means a citizen of any country (other than Pakistan, Bangladesh, Sri Lanka, Afganistan, China, Iran, Nepal or Bhutan), if
he at any time held an Indian passport; or
he or either of his parents or any of his grand-parents was a citizen of India by virtue of Constitution or India or Citizenship Act, 1955

What kind of Bank Accounts can be operated by NRI's?

A. NON-RESIDENT (ORDINARY) ACCOUNT
1) Who can open and how?
The current bank account of an Indian national going abroad and becoming a Non-Resident Indian is fundamentally entitled as Non-Resident (Ordinary) account (NRO). Ordinary accounts can also be opened by NRI even by making remittances from abroad or by transfer from an existing Non-Resident account in India in his/her own name. For other types of joint accounts, the permission of Reserve Bank of India (RBI) is necessary.

2) What kind and category of accounts can be opened?
NRO account can be maintained in the category of current, saving, and term deposit accounts.

3) What types of transactions are granted?
All types of transactions of deposits and withdrawals to and from NRO account are usually acceptable. However, the RBI has recommended certain transactions needed to be reported to RBI in prescribed forms.

4) Can the funds be repatriated?
Repatriation is subject to RBI approvals however, the funds can be freely withdrawn from the local disbursement without RBI approval.

5) Is interest earned exempt from tax?
No, the interest of deposits in NRI accounts and balances standing to the credit of such accounts are not exempted from Income Tax.

B. NON-RESIDENT (EXTERNAL) ACCOUNT (NRE)
1) Who can open and how?
NRI as well as OCBs are allowed to open NRE account. Only by depositing foreign currency alongwith the account application form, the NRE accounts can be opened. NRE account can be opened only during the visit to India by withdrawal of foreign currency traveller’s cheques or foreign currency notes.

2) Can the funds be repatriated?
Yes, the funds can be repatriated at any time without any reference to RBI, but only outside India. At the time of repatriation, the amount to be repatriated is reformed into the designated foreign currency at the prevailing market rate of exchange. NRE account provides all the facilities of the NRO account and also complete repatriation without informing the Reserve Bank.

What is the position under FEMA regarding acquisition of immovable property by NRI/PIO?

PIO resident outside India, are permitted:

to obtain any immovable property other than agricultural land,farm house or plantation property in India by purchase, from out of

(a) payments or funds received in India by way of inward remittance from abroad, or

(b) payments or funds held in any non-resident account of the investor, or
to obtain any immovable property in India other than agricultural land,farmhouse or plantation property by way of gift by NRI/PIO can be credited; or
to obtain any immovable property in India in support of inheritance from a resident person or a non-resident person who had acquired such property in accordance with the law of foreign exchange in force at the time of acquisition.

What are the benefits offered to NRIS/PIOs/OCBs under the liberalized Exchange Policy in respect of immovable property?

Non-resident Indians are authorized to transfer any immovable property in India to a resident person and any immovable property other than agricultural or plantation property or farmhouse, to a non-resident Indian or person of Indian origin.

Persons of Indian origin are allowed to transfer any immovable property in India other than agricultural land / farm house / plantation property, by way of sale to a resident person; any agricultural land / farm house / plantation property in India, by way of gift or sale to resident person who is a citizen of India and any residential or commercial property in India; by way of gift to a resident person or NRI/PIO.

Can the sales proceeds of immovable property in India are repatriated?

Yes, the sale proceeds of an immovable property in India can be repatriated if following conditions are fulfilled

(a) The immovable property was obtained by the seller only if the conformity with the law of foreign exchange in force at the time of acquisition;

(b) The amount to be repatriated does not exceed the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in FCNR A/c, or the foreign exchange on par, as on the date of payment, where the amount paid of out of NRE A/c.

(c) In the case of a residential property, the repatriation of sale proceeds restricted to not more than two such properties.

(The condition for non-repatriation of sale proceeds for a duration of 3 years has now removed by RBI circular dt. 1.11.2002)

Can the NRI avail Housing Loans against Security of Immovable Property?

Yes, subject to certain terms and conditions, NRI can avail Housing Loans against Security of Immovable Property:

The amount of loan, margin money and the repayment period will be leveled with those applicable to housing loans being allocated to residents.

The loans shall be fully secured by creating impartial mortgage of the property projected to be acquired and if essential, be lien on borrower’s other assets in India.

The loan amount shall not be credited to NRE/FCNR/NRNR account of the non-resident borrower. Such loans can be repaid by the borrower by way of inward remittance through normal banking channel or by debit to his NRE/FCNR (B)/NRO account or out of rental income borrowed from renting out such property.

Repayment of loan may be made by the borrower in installments through normal banking channels or by the borrower’s close relatives through their account in India or out of funds held in his NRE/FCNR/NRO/ NRNR accounts in India.

What security will NRI's have to provide?

Commonly the security for the loan is first mortgage of the property to be financed and ordinarily by way of deposit of title deeds or though such other collateral security as may be necessary.

In additional provisional security may be required, if the property is under construction. Collateral or provisional security could be in the form of assignment of life insurance policies, submission value of which is at least equivalent to the loan amount, agreement of shares other investments.

Can NRI's give a Power of Attorney in favour of a person of his choice in India to complete loan formalities on my behalf?

Yes, an NRI can appoint a Power of Attorney in India to represent him/her in dealings in India. The power of Attorney should be carried out according to drafts provided by the housing finance company. The power of Attorney can be offered to any Indian citizen of your choice.

Can house acquired by NRI be let out?

Yes, according to the RBI, NRI’s and foreign citizens of Indian origin, can let out their residential properties. However, there are limitations on the repatriation of the rental income acquired from such letting out the property. The rental income is on a non-repatriation basis, thus funds i.e. rental income, can be credited to the NRO Account/ Residential Account in India.

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