Property management services offer a plethora of services such as managing tenants, inspections, maintenance, legal paperwork and safeguard investments while an NRI is living abroad.
FAQ Category: NRIs Property Mistakes
Is NRI Real Estate Investment in India Safe?
Yes, it is with legal validation, proper research and RERA approved projects.
Is it Required to be Physically Present to Purchase Property in India?
No, they can purchase even when abroad. NRIs are required to execute a valid Power of Attorney (PoA), although with care and caution, authorizing someone present in India to complete the sale on their end. Professional property management firms can be recruited for drafting POAs and completing further procedures as well.
What is Real Estate Regulatory Authority and Its Role in NRI Purchases?
RERA (Real Estate Regulatory Authority) established under the he Real Estate (Regulation and Development) Act, 2016, is a regulatory body for real estate projects and ensures transparency and accountability for NRI buyers. Individuals can access the RERA registration number and project details for the property to track its legitimacy and thus prevent possible frauds.
What is TDS Rate on NRI Property Sales?
TDS is deducted by the buyer under Section 195 of the Income Tax Act, 1961, which is based on the nature of the capital asset and is usually about 12.5% on LTCG with additional cess and charges. TDS can also be reduced by claiming DTAA benefits. First, you must submit Form 10F to your bank, along with a Tax Residency Certificate from your country of residence. The bank will subsequently apply the lower TDS rate established by the DTAA on all future interest payments.
Is it Mandatory to have NRE/NRO Account?
If you become an NRI but still have a resident account, you are violating FEMA rules. This starts once you complete 183 days abroad. RBI can impose penalties of up to 2 lakhs. It feels like the bank will freeze things once they notice the status change. Some people might not realise it right away, and that’s easy to miss.
What is the Role of an Encumbrance Certificate?
Encumbrance Certificate provides information about recorded transactions of the property, which helps an NRI assess whether the property has any current charge, mortgage, or any other liabilities.
Does GPA Transfer Ownership?
A GPA does not transfer ownership; it is merely an authority, as the Supreme Court has held. The original owner still has the better title to the property.
Is it Safe to Give Power Of Attorney for Purchasing Property?
A POA can be considered safe to be given if it is carefully executed and authorises the holder with specific powers. Although it itself does not transfer property ownership, granting broad general powers to an untrusted person can create significant risks.