Now Reading: NRIs Face Tax, FEMA Hurdles in Indian Property Deals
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NRIs Face Tax, FEMA Hurdles in Indian Property Deals
Non-resident Indians buying or selling property in India must account for FEMA rules, tax deductions, repatriation limits and power-of-attorney requirements, Livemint reports. The bank account used to fund a purchase affects how…
The Story in Brief
Non-resident Indians buying or selling property in India must account for FEMA rules, tax deductions, repatriation limits and power-of-attorney requirements, Livemint reports. The bank account used to fund a purchase affects how sale proceeds can be transferred abroad. Funds from NRE or FCNR accounts generally allow full repatriation of the original investment for up to two residential properties, while NRO-funded transactions face a $1 million annual limit.
Property sale proceeds must be credited to the seller’s NRO account, including transactions between two NRIs. Buyers must deduct tax at 12.5% plus applicable surcharge and cess when purchasing from an NRI under the new long-term capital gains regime. Livemint also reports that currency movements can reduce returns when measured in dollars, despite strong gains in rupee terms.
The Indian Opinion
The easy story is that rising Indian property prices guarantee NRIs a handsome overseas return. The opposite claim, that property is always a poor choice, is just as blunt. Currency, taxes, liquidity and the intended use of the money matter. The practical test is simple: can the seller document every rupee and meet the applicable repatriation limit without relying on cash or informal settlement? If not, the apparent gain may remain largely on paper.
Source: livemint.com
This story was synthesised by AI from the source linked above.
