Why reality seems the best for NRI’s?
We can’t deny the fact that the outbreak of Covid-19 has had a deep impact on the realty market in India. Additionally, the potential buyers have been quite apprehensive whether to invest now or wait. Historically, the Indian real estate market has been resilient, and in spite of the slowdown that the industry witnessed towards the end of March and the beginning of April this year, in the past few weeks buyers have become more active and interestingly the demand continues to soar from the NRI clientele.
As per a report by 360 Realtors, India’s leading real estate advisory, in FY 21, a total of $13.1 billion of NRI capital is expected to enter the Indian housing industry, growing by 5% on a YoY basis.
NRI’s have a significant chunk of investment in the Indian Real estate market. Post RERA implementation, the confidence levels of NRIs has grown manifold and they have played a vital role in the upward trend of the Indian real estate. Interestingly, NRIs are not buying with the intention of end-use, but many are entering the market with a pure investment purpose. Apart from this, improved outlook of the economy on global platforms is bringing back those investors into the field who were hesitant to invest earlier. This combination undoubtedly makes India a hot destination for investments.
Tax exemption
NRIs can invest in real estate in India and can still manage to save tax like a regular Indian resident. Tax deduction on home loans on principle repayment and interest component can be claimed by the NRIs. Apart from this, for a property sold after two years from the date of purchase, profit so earned on the capital gain is exempted from the income tax.
Rental income
NRIs can invest and earn rental income in India without any trouble. Though the 30 per cent TDS (tax deducted at source) has to be deducted by the tenant, the remaining amount can be repatriated under the Foreign Exchange Management Act rules. This proceeds earned through the sale of immovable property in India can also be repatriated under the act.
Global uncertainty will further trigger NRI investments
NRI’s will continue to get drawn towards the Indian real estate market in big volume in the future too. Apart from an emotional connection with the country of their origin, a weakening Indian rupee & discounted prices of Indian properties will act as an important stimulant.
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