Many times, people migrate to other nations for job opportunities and settle there for a longer period. Nevertheless, when they come back, they believe like making some investment to make their future secure or some people who still live outside the nation and are willing to buy property in India. However, if they are Non-Resident Indians (NRI) and they need to know few things before taking a decision of buying property in India.

These are the five important factors, which they should be considered before buying property in India.

In which type of properties NRIs are allowed to invest –

NRIs cannot purchase agricultural, plantation property and a farmhouse. Though, if these types of properties are inherited or gifted to a non-resident, then only they can own it. An NRI can own residential, commercial, and industrial properties in India. Whenever they decide to buy property in India, they need to have an identity proof of being an NRI, i.e. an affidavit; they will also require an Indian Passport or a PAN number.

Ways to pay for the property in India –

There is good news for NRIs that the rules of the Reserve Bank of India (RBI) are easy to understand. When you decide to buy property in India, you do not require any prior permission from the authorities to buy property in India. Foreign Exchange Management Act (FEMA) holds all the rights for all these properties in India.

You must be prepared to file IT returns in India –

If an NRI purchases a property in India, she/he will have to pay the property tax in India. This has to be done with stamp duty, and registration fees also need to be paid for the property and land. If you earn money in India, it will be included in Income tax. So, be ready to hire someone to file the IT returns in India and for all the legal paperwork.

Tax benefits –

For Non-Resident the income that is received or earned in India is only taxable in India. But, you do not have to pay income tax on the money, which is earned outside India. They can claim Rs. 1 lakh deduction under the section 80C of Income Tax Act, 1961.

Take care of EMI and Forex –

RBI (The Reserve Bank of India) has allowed the NRIs to get the home loans which are up to 80% of the value of the property and land. They will have to pay the loans only in INR. If you choose to pay in equated monthly instalments (EMI) by using your personal earnings from abroad, make sure that you take care of the changes taking place in foreign exchange. The rates always move up and down, so adverse fluctuations can become a burden.

The Indian government has made things simpler for NRI Investment in real estate encouraging the NRIs to connect back to their country.