Real estate developers have always considered NRI’s as an important part of their target audience and the NRI crowd also prefers investing in India because when a comparison is made with the foreign real-estate, India offers much better properties at a much reasonable price making it an ideal choice for NRI’s.
NRI’s Investment Market in India
NRI’s have always played a crucial role in the Indian real estate market. The main reason for their investment is generally either sentimental value to their origin or as a backup plan just in case they ever plan on moving back to India. Generally, they just buy and put up properties for rents assuring a steady sum of the amount coming to them with definite safety and increment in their investment. The currency advantage due to the depreciating rupee plays into their favor, raising their purchasing power. To smoothen the pot, NRI’s can also apply for home loans and they get similar tax benefits like the Residential Indians with respect to repayment and interest rate if they meet a few criteria. Foreign Exchange Management Act 1999, defines an NRI as someone who resides outside India for, “employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period”. It also says that an individual will also be considered NRI if his/her stay in India has been less than 182 days during the preceding financial year and anyone meeting these criteria can apply for home loans in India.
Benefits for NRI’s Investing in India
NRIs can be benefitted from the tax deductions only if they have an income that is taxable in India. If they have taxable income in India, they are eligible to claim deductions on the repayment of interest and the principal amount from the taxable income as per Section 24, 80C and 80EE of the Income Tax Act.
Here’s a list of all the benefits NRI’s can get while investing in real-estate in India if they are defined under FEMA:
- An NRI home loan can be availed to meet all of the property-related requirements, including purchasing a house, constructing a house and renovating an existing property in the country.
- The difference between the value of foreign currencies like dollar or euro in comparison to rupee give a great advantage and raises purchasing power.
- The application process is hassle-free and barely takes up any time.
- With most banks, a candidate can apply for an NRI home loan online. The process is easy and transparent. The tracking of the application is also very easy, from anywhere in the world.
- Almost all banks provide a prepayment facility for either none or very little extra fees.
- There is no restriction on the number of properties NRI’s can purchase in India. However, agricultural land, plantation land, or a farmhouse cannot be purchased, only residential and commercial properties.
Home Loan Interest Rates for NRI’s
Most banks offer NRI home loans that have attractive interest rates on a monthly reducing basis. The candidates also have the option to choose between fixed or a floating interest rate but the candidates must be under the following regulations:
- Age: 18-70 years
- Nationality: Indian, Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs) are all eligible. Overseas Citizens of India (OCIs) are also eligible except citizens of Afghanistan, Bangladesh, Bhutan, China, Iran, Nepal, Pakistan and Sri Lanka.
- Work Experience: At least two years of experience in the company he/she currently works for
- Loan Amount: The amount depends on an individual borrower’s profile and differs from person to person
- Loan Tenure: Most banks allow a loan tenure of up to 30 years
- Prepayment Charges: The prepayment charges for most lenders are 0%-2%
- Late Payment Charges:For most lenders, late payment charges are 1%-3%
- Other Prerequisites: NRIs require an Indian resident to be a co-applicant, co-borrower or co-owner of the respective house or property
- Interest Rates: Interest rates vary for different banks, like SBI and HDFC offer 6.70%-7.00%pa, ICICI offers 6.70%-7.95%pa, LIC Housing Finance offers 6.90%-7.30%. The overall range of the interest rates is 6.70%-8.90% in 2021.
TMR Group believes that every NRI is still as much Indian as the rest of us. Therefore, all our projects offer the best deals on home loans for NRIs. They have excelled in their field and are making India proud overseas. It is our humble way to say – thank you and offer them NA plots in Hyderabad with the best returns.