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Property Mela showcases India's lucrative real estate sector
October 31, 2015, 5:14 pm

Indian Property Mela 2015, which was inaugurated on Friday at the Crowne Plaza Hotel, is drawing a steady stream of investors and home buyers eager to capitalize on the special offers and one-off deals being presented during the two-day exhibition.

Organized by the English daily Kuwait Times, in association with Aashiaana, a leading property portal in Kuwait, the exhibition allows visitors to meet and interact with some of the top Indian builders and real-estate developers, giving them the singular opportunity to gain first-hand information on ongoing and upcoming real estate projects across India.

Hundreds of projects, ranging from affordable apartments to luxury villas, from some of India’s top developers, including Lodha, Kanakia, Mahindra Lifespaces, Hubtown, Vaishnavi, Propshell, KoltePatil, Nahar’s and Supertech, are on offer at the Property Mela.

Developers are highlighting their properties in cities such as Mumbai, Navi Mumbai, Pune, Thane, Nagpur, Ahmedabad, Gurgaon, Noida, Goa, Hyderabad, Bangalore and Chennai, among other places.

With real-estate investment once again on the rise, the Indian Property Mela is an ideal venue for Non-Resident Indians (NRI) in the country to explore the potential of buying properties or making investments in this highly rewarding sector.

However, before venturing into any real-estate investment, there are a few things that NRIs should be aware of. In addition to doing due diligence on the properties involved, the buyer or investor should understand and outline the basic objective of buying the property. This will help them leverage provisions in the Indian Foreign Exchange Management Act and in the Income-tax Act to their benefit.

Foreign Exchange Management Act: As per this Act, an NRI enjoy almost all the privileges which are enjoyed by a resident Indian with reference to purchase of immovable property in India. This Act states that an Indian citizen who resides outside India is permitted to acquire any immovable property in India, other than agricultural/plantation property or a farm house.

Purchase of property by NRI for self-use: NRI’s can invest in a residential property for their use.  This property can be in the form of ownership flat or a piece of land.  In both situations, recent liberalized rules by the Reserve Bank of India, taking a loan to buy the property could prove to be the best  strategy.

Real estate investment for rental income: NRI’s can invest in a residential or commercial property with the objective of receiving a regular flow of rental income. The provisions of taxing rental income are simple, easy and investor friendly.  Broadly speaking, from the rental income derived by a NRI, deductions are available in respect of actual payment of house tax. These deductions are permissible irrespective of whether or not you spend on repairs.

Another important feature of taxation relates to complete deduction without any limit to interest paid by the NRI for purchase of property which is given on rent.  That is, the entire interest payment for purchase of property which is given on rent is allowed as a deduction from the rental income.   

The tax saver formula: It is strongly recommended that NRIs do not sell their property at least within three years of purchase. In case the property is sold before the completion of three years, it is liable to tax and is to be added with other income of the NRI. If sold later, then this clause does not apply.

Repatriation of rental income and sale proceeds of property: Within the provisions of the Foreign Exchange Management Act, it is possible for a Non-Resident Indian to repatriate the rental income received from investment. As well as to repatriate the proceeds of sale of immovable property in India, as long as this property was purchased by remittance from abroad or from a NRE Account.

Income-tax compliances: Whenever a NRI invests in an immovable property; it is advised to obtain a Permanent Account Number (PAN) Card so that if the NRI has certain income by way of rental income from India, then it is easy for him to make tax compliances.

Reverse Mortgage Benefit for NRIs: The concept of reverse mortgage is very popular in India.  Today’s senior citizens in particular are taking advantage of reverse mortgage in respect of the real estate owned by them in India.  The amount taken from the bank consequent to reverse mortgage is not added to the income of a NRI and is not taxable.  Thus, in old age this could prove to be beneficial.

Real estate investment might be a difficult decision to make; however, if made wisely, it could prove to be a highly rewarding one. An ideal opportunity to explore the potential of this lucrative sector is to visit the ongoing Indian Property Mela 2015.




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