An article in Business line highlights how “With RERA kicking in, NRI interest in Indian realty set to rise”
Implementation of Real Estate (Regulation and Development) Act, 2016 will boost the Non-Resident Indian sentiments on Indian real estate sector, say market experts.
With more transparency coming in the realty sector, there is bound to be an increase in the number of NRIs planning to buy property back home, they said..
The Indian real estate sector, in recent times, has witnessed a lot of changes, more so after the introduction of the Real Estate (Regulation and Development) Act, 2016 and the Goods and Services Tax (GST).
“As RERA will ensure timely delivery of projects and also since all the information will be available online, it will boost the confidence of NRIs who are thinking of investing in the Indian real estate market. But, the GST might have a negative impact on the buyers as there might be increase in the price of the properties,” said Parveen Jain, Vice-Chairman, NAREDCO (National Real Estate Development Council).
Right now, prospective home-buyers have to pay a 12 per cent GST to developers if they are planning to buy a property which is under construction. However, there is no GST on the fully constructed property.
Also check out our recent articles on investing in India:
Last week we saw an announcement regarding “PPF accounts to be closed, interest lowered to 4 per cent if you become an NRI”. This has obvious implications for NRIs who were planning to continue holding their Indian investments in PPF and other funds.
An article in TOI this week focuses on “How NRIs can get past their tax worries”
- TDS can be a pain – Tax deduction at source (TDS) is a major pain point for NRIs. Resident investors in stocks and mutual funds are not subjected to TDS, but NRIs are. Short-term capital gains from stocks are subject to 15% TDS, while those from debt funds and debentures, gold and property are slapped a higher rate of 30%. Even longterm gains from property and gold are subject to 20% TDS. The TDS on the interest on bank deposits is only 10% for resident Indians, but NRIs have to cough up 30%.
- How to avoid TDS – One way NRIs can avoid the high TDS is by being the second holder in joint investments. For all investments, the tax liability is always that of the first holder’s. If the first holder is a resident Indian, the gain will not be subjected to any TDS. Similarly, if the NRI is the second holder in a property, the TDS will not apply unless the rent is above Rs 50,000 a month.
- Claim tax benefits – Though NRIs are beaten by the TDS stick, they also get some carrots. The interest earned on NRE account is tax free and continues to be exempt for two years after the individual returns to India. It’s best to retain deposits held in foreign currency in the NRE account to earn tax-free interest for two more years. After two years, when the tax status changes, these deposits can be moved to the regular savings account.
Economic Times also reviews “How NRIs can avoid tax troubles”
A livemint article – While filing tax in India, NRIs do not have to state overseas income – examines a few Frequently asked questions:
- I am moving to Cambodia for a long-term assignment. I am told that India does not have a Double Taxation Avoidance Agreement (DTAA) with that country. Please let me know how that will impact my tax outgo. I have interest income in India and will continue to file tax return on that. Will I have to include my income in Cambodia in the India tax return as well, and pay tax on it again in India?
- I am an NRI and I had purchased some land in a rural area of Thiruvananthapuram, Kerala, in October 2014. I am now planning to sell it to buy a new plot in an urban part of the city. We had bought this property for Rs15 lakh and will be selling it for Rs35 lakh. Please tell me my tax liability on this, considering that I am an NRI.
- I am an NRI, and I want to buy a car in India, without taking any loan. I will be using funds from my non-resident external (NRE) account. Can you explain the tax implication if the car is in my name or somebody else?
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