Piramal Realty, a trusted name in the industry, offers meticulously designed homes in prime locations like Mumbai and Thane, catering to the lifestyle and investment aspirations of NRIs.
If you’re wondering, can NRI buy property in India? Absolutely! Indian laws allow NRIs to purchase residential and commercial properties, making real estate a highly accessible and attractive investment avenue. Keep reading to know more about it.
Is it Good for NRIs (Non-Resident Indians) to Invest in Real Estate in India?
Are you an NRI looking for the most promising and secure investment option in India? Investing in the Indian real estate sector might be the perfect choice for you. The luxury housing market in rapidly urbanizing cities and semi-urban regions is experiencing a significant boom, driven by the ever-growing demand for residential spaces in well-connected metropolitan areas.
Why Real Estate in India is a Smart Choice for NRIs
Statistics reveal a steady upward trend in NRI investment in Indian real estate. In 2020, NRIs contributed 10% of the total investment in this sector. This figure rose to 15% by 2023 and is projected to reach 20% by 2025. Clearly, the potential for growth and returns is substantial. Let’s explore the key factors that make NRI investment in Indian real estate so lucrative.
1. Capital Appreciation
Prime residential spaces developed by reputed builders, such as Piramal Realty, are particularly attractive to NRIs and India’s affluent classes. For NRIs, these properties often serve as retirement homes, holiday homes, or legacy assets. For the Indian upper-middle class, such properties symbolize a lifestyle upgrade with modern amenities like clubhouses, swimming pools, jogging tracks, and 24/7 security. This continuous demand drives up property prices in well-connected, rapidly developing areas, ensuring robust capital appreciation.
2. Rental Income Opportunities
India’s urban centers consistently attract working professionals and students in need of rental housing. This constant demand ensures a steady rental income stream, even during economic fluctuations, making real estate an attractive investment for NRIs.
Tax Benefits for NRI Real Estate Investors
The Indian government offers several tax benefits to NRIs investing in real estate, making it a financially savvy decision:
1. Tax Benefits on Home Loans
- Principal Repayment: Under Section 80C of the Income Tax Act, NRIs can claim deductions of up to ₹1.5 lakh.
- Interest on Loan: Section 24(b) allows deductions of up to ₹2 lakh for self-occupied properties, with no cap for rented properties.
- Stamp Duty and Registration Charges: Deductions under Section 80C are also applicable for these charges, subject to the overall limit of ₹1.5 lakh.
2. Exemptions on Rental Income
- A standard deduction of 30% applies to rental income under Section 24(a), reducing taxable income significantly. Additionally, TDS on sale of property by NRI is an important consideration, ensuring compliance with tax regulations when selling real estate assets in India.
3. Capital Gains Tax Exemptions
- Long-Term Capital Gains (LTCG): Properties held for over two years qualify as LTCG, taxed at 20% with indexation benefits.
- Section 54 and 54EC Exemptions:
- Section 54: Reinvesting proceeds in another residential property within the specified timeframe exempts LTCG.
- Section 54EC: Investing in bonds like REC or NHAI within six months provides an exemption of up to ₹50 lakh.
Other Financial Benefits for NRIs
1. Favorable Currency Exchange Rates
Investing in Indian real estate using foreign currencies like the US Dollar or British Pound offers significant advantages due to favorable exchange rates, making properties more affordable for NRIs.
2. Portfolio Diversification
Real estate provides tangible assets to balance financial portfolios that may already include stocks, bonds, or mutual funds. It also acts as a hedge against inflation, particularly in emerging markets like India.
3. Repatriation of Sale Proceeds
Under FEMA regulations, NRIs can repatriate up to $1 million per financial year from property sales, ensuring liquidity and ease of managing finances.
4. Easy Financing Options
Indian banks offer home loans at competitive rates, making it convenient for NRIs to invest even without sufficient upfront funds.
Emotional and Legacy Value
For many NRIs, owning a property in India is more than a financial decision—it’s about staying connected to their roots and creating a legacy for future generations.
Conclusion
Whether driven by financial gains or emotional bonds, investing in Indian real estate is an excellent choice for NRIs. With favorable tax benefits, robust rental income potential, and opportunities for capital appreciation, 2025 is the ideal time to make your move. Here are some of the essential guidelines that you can keep in mind if you’re an NRI looking to invest in Indian real estate.
Explore premium properties by Piramal Realty and make the most of your investment in India’s thriving real estate market.
Frequently Asked Questions
What is the best investment for NRIs in India?➕
Real estate is one of the top investment options for NRIs, offering tangible assets, tax benefits, and high returns through rental income and capital appreciation. Other options include mutual funds, fixed deposits, and the National Pension Scheme (NPS).Can NRIs invest in real estate?➕
Yes, NRIs can invest in residential and commercial properties in India. However, they cannot purchase agricultural land, plantation properties, or farmhouses unless inherited or gifted.
Do NRIs have to pay tax on property sales in India?➕
Yes, NRIs are subject to a 20% TDS on LTCG and 30% TDS on STCG. They can claim exemptions under Sections 54 or 54EC by reinvesting the gains, and excess TDS can be refunded by filing tax returns.
How many properties can NRIs own in India?➕
NRIs can own multiple residential and commercial properties. However, agricultural land, plantations, or farmhouses can only be acquired through inheritance or gifts.
Do NRIs get tax benefits for buying a home in India?➕
Yes, NRIs enjoy tax deductions on home loans, rental income, and capital gains. Deductions under Sections 80C, 24(b), and others significantly reduce tax liabilities.
Disclaimer- The views expressed above are for informational purposes only based on industry reports and related news stories. Piramal Realty does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
