Here is a list of all the regulations to help you:

FEMA Rules: All the real estate transactions fall under the purview of the Foreign Exchange Management Act (FEMA) The investors need not seek any permissions from the Reserve Bank of India. The RBI has permitted the NRIs to buy any residential or commercial property in India. There are no restrictions on the number of real estate properties an NRI wishes to purchase.

The Indian Real Estate Market: The social infrastructure in most of the cosmopolitan Indian cities has improved. Top cities of India (Like Pune & Hyderabad) have ramped up their civil infrastructural development. It has given an immense rise in the standard of living with more hospitals, schools and shopping malls coming up and improving the connectivity.

An NRI can purchase the property, either as a single owner or jointly, with any other Non-Resident of India. The developers in India are offering good deals and benefits such as flexible payment plans and subvention schemes

Nature of Property: NRIs living in Singapore, Dubai, Sri Lanka, Bhutan, China, Thailand, Indonesia, etc. find India as one of the attractive options to make real estate investments.

It’s a smart move, as the FEMA & RBI rules and regulations are too flexible and allow an easy flow of investments coming from NRIs. NRI Investors can buy all sorts of immovable properties in India other than agricultural land, farmhouses and plantation properties (Rules are different).

Details of Documents: For all those who are planning to invest can rejoice. The best part is that not every document is needed. You’ll need a valid passport, address proof, a Permanent Account Number (PAN card) and a recent photograph.

Power of Attorney: As the NRI does not reside in India, they can choose anyone from their relatives, colleagues, friends or trustworthy people. Make that person as a POA (Power of Attorney) for your rescue. In case, the NRI is not able to come to India to carry out any legal transactions. All the documents about the purchase can be executed hassle-free in the buyer’s absence. The legal transactions can be handled on your behalf by your POA.

Tax Benefits: NRIs and residents of India have different tax systems and rules to follow. NRIs who buy a property have to deduct Income Tax at 1% if the value of the property is more than 50 lakhs and this amount has to be paid to the Income Tax Department.

But, if you’re buying this property from another NRI, this rate is much higher. If the property is for self-use and is financed through a home loan, the interest paid on loan is deductible from the NRI’s total taxable income. The deductible amount is capped at Rs.1.5 lakhs, and NRIs can also get tax deduction benefits on the repayment of the loan.

Loan Procedure: The RBI has granted permission to banks and housing finance institutions registered with the National Housing Bank to provide home loans for NRIs to buy real estate property in India. All the essential transactions have to be made in Indian currency. The loan cannot be credited directly to the bank account of an NRI. It will be disbursed to either the seller’s or the developer’s bank account directly.

The loan can be repaid using funds in an NRI’s NRO(Non-Residential Ordinary) / NRE(Non-Resident External) account or FCNR (Fixed Deposit Foreign Currency account) deposits. Traveller’s cheques or foreign currency is not an acceptable means of payment.

Repatriation of Funds: There are specific guidelines for repatriation of funds for the NRIs for the sale of immovable property in India. The property has to be purchased concerning FEMA guidelines. The amount repatriated cannot exceed the original amount paid for the property.

In the case of a residential property, repatriation of sale proceeds is restricted to less than or equal to two properties. Citizens of Pakistan, Bangladesh, Thailand, Singapore, Sri Lanka, HongKong, Indonesia, China, Afghanistan and Iran must seek specific approval from the RBI for repatriation of sale proceeds.

Conclusion: NRIs should strictly verify points, such as the track record and brand visibility of the developer, the social and civic infrastructure available in the location, the amenities in the project and the timelines for possession, in the case of under-construction projects. Enquire and read about how NRIs can invest in Indian real estate to understand all the legal requirements.

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Have a look at advantages of the RERA Act.

Right to Information About the Property: This is one main advantage of the RERA act in favor of the home buyer. This information can help you on multiple fronts. The developer is entitled to share all the details regarding the project such as plan layout, plan of execution, completion stages, the status of competition, etc.

Builders Won’t Be Able to Delay the Projects: Under this Benefit of new RERA act. 2016, each property developer have to give a due date of the possessions of the flat.
And if the developer is not able to complete the project until that date, then they will have to face many penalties. If the developer failed to give possession on the given date then the buyer has the following options
• To withdraw from the project – wherein he/she is entitled to get a full refund along with the interest.
• To continue with the project – in this case, he/he is entitled to get compensation along with interest.

Advance Payments: A Builder cannot take more than 10% of the cost of the Flat as an advance or application fees before entering in the agreement of sales. This is one of the major benefits of Rera.

Right Of the buyer in case of any false promises: In Case of any mismatch in the commitment or Promises made by the builder regarding the actual project. Then the buyer has the option to withdraw from the projects, wherein he is entitled to get a full refund of the amount he paid as advance or in some cases interest and claim compensation

Builders will need all clearances before selling: Earlier days, builders used to sell a project that did not have all clearances. Results many complicated problems to the home buyers. But under RERA Act. All developers, builders and real estate agents will have to register himself with the regulator, and disclosing all each and every detail about the projects and then only they can sell projects only after the necessary clearance have been verified.

Builders won’t be able to use your money for some other project: Untimely delivery of real estate projects has been the biggest Problem for Home buyers. According to Economic times, almost all the real estate project launched between 2010 and 2013 had defaulted their possession date primarily because of the fund collected by the builder from buyer were diverted to a new project.

Reduction in Prices of Real Estate: When RERA act comes to action in 2016 it has a direct impact on the price of the home, land and interest rate of your home loan. Because of the RERA act, The trust and transparency in the real estate business have been improved. Investment is also increased in the real estate sector. All these signals give Growth to the sector and higher demand is slowly decreasing the price and therefore the interest rate on home loans

The benefits of RERA are not just limited to homebuyers, but it also helps the developers and real estate agents in a number of ways. RERA act is making the Real Estate sector more professional and secure for investors builders as well as Buyers.

At the end make sure you buy a project which is registered under regulatory authority!

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