NRIs Legal Services For Property Investment

Nearly 22 million Indians are living abroad. Many of them desire to occupy their own home in the very town or city where they took birth. If somehow they muster courage by setting up their mind to resettle in the native land, lacking legal services in India stands as the biggest barrier. From whom they should consult? What if some greedy real-estate owners make them fool and run away with their money? Such fears frighten them and hence, they postpone their heartily desire.

Thanks to the recent amendments and improvised laws that have re-ignited their hope to come and invest in property. It is true that an investment in land will never leave you robbed. Thereby, NRIs endeavor to spend their hard-earned money in property. It assures enhancement in its face value in future. Moreover, they have surety and contentment of having their own home.

Who governs land transactions in India:

The apex financial institution Reserve Bank of India (RBI) takes charge of NRIs property investment. Such transactions of migrants fall under the FEMA, i.e. Foreign Exchange Management Act. However, RBI is the governing body but a migrant does not need to take permission for making a land deal.

According to FEMA, any individual who lives outside the country is considered as NRI or non-resident of India. If you, too, fall in the same category, you can own any residential or commercial property, except the land reserved for agriculture, farm house or plantation.

Rules of Income Tax for NRIs’ Ownership of Property:

1. As per legal services for NRIs, owing one property will levy no Income Tax in India.
   
2. Occupying more than one residential property globally will be deemed the owner as liable to pay Income tax. The other property will be considered as ‘property on rent’, although you are using it as rental property or not. As per Income tax slab, the rental income is to be calculated to pay it off.
   
3. The second property can be located outside the country or abroad. If so is, the Income Tax is to be paid.
   
4. If you have one property in India and another in abroad, the former will be estimated as rental property. So, the tax deduction will be done by revaluating the property’s rent as per Income Tax slab.
   
5. If you have inherited property which is the only property you have of your own, it will not be grouped under taxable property.
   
6. If you have another property in any part of the world apart from inherited one, even then also, you have to pay income tax of that inherited property also.   
   

What is the substitute of the land owner:

Migrants lack time and find it time-consuming to aboard a flight to India. It does not mean that all doors are shut for them and they cannot invest in property. POA, i.e. Power of Attorney, assigns them power to make it. So, the owner can handover his power of authority to sign the deal through POA to any reliable individual. For this purpose, a deed is prepared which is termed as ‘Power Of Attorney’. This legal document consists of the name of the actual owner as Grantor or Donor or Principal. On the other hand, Donee or Grantee or Attorney or Agent is identified as to whom authority is granted.

POA can be utilized in two different ways:

1. General power of attorney: With this the Attorney gets power of inking more than one deal or transaction on behalf of Donor.
   
2. Specific power of attorney: This POA is assigned only to do specific transaction and not more than that.