Investing in property in India is a lucrative option for non-resident Indians (NRI). The sub-prime crisis in the US and the dim prospects of investing in EU nations has further motivated NRIs to invest in property back home.
Additionally, บ้านมือสอง the laws in India are encouraging of real estate investment by NRIs. For instance, the procedure for investing in property is simple. What's more, NRIs can avail significant tax benefits on their property investment.
While chalking out a plan for investing in property in India, what's important is that you're aware of the crucial dos and don'ts of investing. Let's take a look at some important ones.
Dos
Check the type of property you're investing in.
An NRI cannot invest in all types of property. Agricultural land, farmland and plantations are not permitted for NRI investment as per the guidelines issued by the Reserve Bank of India (RBI).
Check for the legality of the property.
As certain kinds of lands are unavailable for NRI investment, you should check the land details for legality. Some housing projects are built on illegal lands and without permission from the concerned authorities. You don't want to be investing in such a property and regretting it later. So check all possible legal documents before investing.
Prepare a sale deed and get it registered.
You should create a sale agreement containing information such as the advance payment, the final amount, the period within which you have to pay the amount, and the details of installments. Once you do this, register your sale deed with the sub-registrar or Sub-District Magistrate to make it official.
Don'ts
Don't opt for non-banking or alternate channels for availing finance for your property.
Once your eligibility for investing in property and the property documents are verified, you can take a loan from any credible Indian financial institution. Lenders will be more than willing to fund your purchase. With such an excellent support structure for financing, you shouldn't opt for alternate channels no matter how appealing they may seem at the start. You will have a happy time as long as you follow the law of the land in availing finance.
Don't shy away from paying all your taxes.
You'll have to pay some taxes along the way, including stamp duty, registration charge, municipal taxes, and service tax. Other taxes that you might pay, in certain cases only, is the withholding TDS (tax deducted at source) and wealth tax.
Although it may seem like you have to pay many taxes, you should know that you're also entitled to many tax benefits. Under Section 80C of the Income Tax Act, you can claim a deduction of Rs. 1 lakh. Furthermore, unlike for the Indian residents, there's no upper limit to the deduction you can claim on your home loan interest.
There's so much to gain in terms of tax benefits from your property investment. Then, why not pay all your taxes?
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