NRI Guide to Buying Property in Chandigarh Tricity: Rules, Taxes & Legal Process

Are you a Non Resident Indian looking forward to owning a house in your home town? Well, in that case, the Tricity of Chandigarh, Mohali, and Panchkula, along with their developing zones such as Zirakpur, Dhakoli, and Aerocity, is something that you should definitely look out for in real estate. Having fantastic infrastructure, great rental yield, and high price appreciation, investing in Tricity is quite a safe and wise choice for NRIs.

But before finalizing your purchase, there are many things that you need to know about the procedure and laws regarding buying. Here at Peoples Property Point, we are your trustworthy Zirakpur property dealers and ensure that you get all your queries answered.

Who Qualifies as an NRI for Property Purchase?

As per the guidelines of Foreign Exchange Management Act (FEMA), an NRI refers to the situation where an Indian national resides outside India, permanently, due to his or her work, business transaction, education, or any other reasons.

In addition to NRIs, there are other categories of people who can buy property in India:

• Overseas Citizen of India (OCI) holders: These refer to non-Indian nationals of Indian origin who can invest in both commercial and residential real estate
• Person of Indian Origin (PIO): Current PIO holders will automatically become OCI and have the same right

Key points:

• Investment in both residential and commercial real estate
• Agricultural land, farmhouse, or plantation properties not allowed, unless gifted or inherited
• Investment in Indian properties must be done through NRE/NRO/FCNR accounts
• Must adhere to FEMA guidelines

It is a legitimate procedure for NRIs to invest in Indian properties.

What Type of Properties Are Available to Purchase in Chandigarh Tricity?

The following kinds of properties can be purchased by an NRI in Tricity:

• Residential properties like flats, independent floors, villas, and kothis
• Commercial properties like shops, offices, and showrooms

However, an NRI will not be able to buy agricultural land, plantation, and farmhouse without seeking approval from RBI.

But since real estate in Tricity is more focused on residential and commercial properties, such restrictions do not affect the buyers much.

A variety of properties that are suitable for NRIs can be found at People’s Property Point in Zirakpur, Mohali, Panchkula, and Dhakoli.

Key Rules Under FEMA for NRI Property Purchase

Property purchase by NRI is regulated not only by FEMA but also as per the guidelines issued by RBI.

The main points are as follows:

• RBI’s permission is not required for purchasing residential/commercial property
• Amount to be paid as the consideration in property purchase can be made from NRE, NRO, or FCNR accounts alone
• No payment is permitted in foreign currency (for instance, in US dollars, GBP pounds, etc.)
• There is no restriction on how many properties an NRI wants to buy

Taxes Applicable on NRI Property Purchase in Chandigarh Tricity

There are various factors that need to be considered during the purchase of a property. Taxation can be said to be one of the first considerations. The following is the tax structure applicable in case of NRI purchasing a property in Chandigarh Tricity:

1. Tax Deduction at Source (TDS)

When an NRI decides to sell his/her property, it becomes essential for the buyer to deduct TDS as follows:

• Long Term Capital Gains: 20% of selling price
• Short Term Capital Gains: 30% of selling price

If you are an NRI buying from a resident of India, then you will have no liability of paying TDS. However, in the event of you purchasing from another NRI, you have to pay TDS based on the above criteria.

2. Stamp Duty and Registration Charges

For Punjab and Tricity areas:

• Stamp Duty: 6% (for men) / 4% (for women)
• Registration charges: 1%

The charges are the same whether you are an NRI or resident Indian purchaser

3. GST (Goods and Service Tax)

If the property being constructed has been bought directly from the builder:

• GST @5% on Residential Properties
• GST @12% on Commercial Properties

Properties that have been completed and ready for occupancy are not liable to pay GST.

4. Income Tax on Rental Income

If the NRI is renting out his property in the Tricity Area, then he shall be liable to pay income tax in India. The tax on rental income will be deducted at the rate of 30%.

Repatriation of Sale Proceeds

An NRI will be able to repatriate sale proceeds of the property which is located overseas, subject to the conditions listed below:

• Where the property is purchased by means of NRE/FCNR accounts – Entire amount can be repatriated, including capital gain (up to 2 properties)
• If the property is purchased with the help of NRO account – Maximum repatriation allowed per annum is $1 million
• The payment of tax is compulsory prior to repatriate

Step-by-Step Legal Process for NRI Property Purchase in Chandigarh Tricity

Step 1: Selection of the Property

Search for verified information related to flats, plots, kothis, and business properties available in Zirakpur, Mohali, Panchkula, and Chandigarh. Genuine real estate agent helps NRIs in selecting their desired property according to budget and other requirements.

Step 2: Title Search and its verification

Do detailed study on title search including proper verification. There should be single ownership without any mortgage or any kind of legal dispute, and it must possess building plan clearance from GMADA/HUDA/municipality.

Step 3: Execution of PoA

As NRIs are not able to travel to India every time for property related formalities, therefore, they can execute PoA on behalf of some other person like their family member or advocate.

Step 4: Token Amount and Agreement to Sell

Token amount has to be deposited, and the Agreement to Sell form should be executed, specifying the terms and conditions, date of possession, and mode of payment.

Step 5: Registration of Sale Deed

The Sale Deed will be executed and registered with the Sub-Registrar. The stamp duty and registration charges will be paid.

Step 6: Mutation

After the execution of Sale Deed, Intkal application needs to be filed to get the property transferred in the revenue records.

Documents Needed for Buying Property by NRI

Here’s the document you need for buying property by NRI:

• Passport & Visa Copy
• OCI/PIO Card (if any)
• PAN Card (compulsory)
• NRE/NRO Bank Account Details
• Power of Attorney (if buying through power of attorney)
• Proof of Address (both abroad and Indian)

Also Read: How to Avoid Real Estate Frauds while Buying Property in India

Conclusion

For Non-Resident Indians who wish to make investments into properties, investing in the Chandigarh Tricity region proves to be an excellent choice due to the benefits of long term profit, state-of-the-art facilities and demand for rented property in the region.

Regardless of whether you choose to purchase property in Chandigarh, Mohali, or Panchkula, understanding the FEMA laws, taxes and other requirements would prove helpful in ensuring that your investment is successful. Contacting Peoples Property Point make this complicated process smooth and easy.

FAQs

What should be the bank accounts of NRIs for paying for the property?

NRIs must open NRE, NRO, or FCNR accounts for property transaction purposes. FEMA regulations do not permit dealing in cash and demand clear banking details.

Is PAN card mandatory for NRI property purchase?

PAN card is a necessity for property transaction as it is compulsory for tax purposes and other property related financial transactions.

What taxes do NRIs pay while purchasing property?

Stamp duty, registration charges, and TDS are some taxes paid by NRIs on property transactions.

Is there any facility to get home loan in Chandigarh Tricity for NRI property?

Yes, many Indian banks offer home loans for NRIs depending upon their income outside the country, occupation, financial strength, and related documents such as passport, visa, and bank statement.

Why it is required to verify RERA for NRIs?

This is necessary because RERA will ensure that the project is legal, transparent, and according to its construction schedule, helping NRIs to avoid getting involved in fraudulent activities.

Is it possible for NRIs to appoint a third party in India to purchase the property on their behalf?

Yes, NRIs have the provision to appoint any individual to complete paperwork in India through a power of attorney.