Property Type NRIs can Buy in India

Bangalore: Non-resident Indians (NRIs) who are looking out for properties in India are often concerned about the type of property they can invest on, in Indian market. The other cause of concern is the numbers of properties NRIs can investment on, source MagicBricks Bureau.

Asha Nayar Basu, Partner, S Jalan & Co stated that according to Indian law, NRIs are eligible to buy immovable properties, except agricultural land or farmhouse plantation property moreover, they are not permitted to own such properties even as a gift. Immovable property includes either residential or commercial properties, which NRIs can obtain. As per current regulations, NRIs can buy unlimited properties in domestic market.

However, as per Indian Income Tax Act, if a person, resident or non-resident Indian possesses more than one property then only one property will be considered as self-occupied and no income tax will be counted on that said property. But, the second property will be considered as rental property and the possessor has to pay taxes, whether it has been rented out or not.

Now the question arises as, whether prospective NRI buyers need any prior authorization from Reserve Bank of India (RBI) to buy a property in India. As per RBI website (http://www.rbi.org.in), NRIs who reside in Bangladesh, Afghanistan, Pakistan, Iran, Sri Lanka, China, Nepal and Bhutan, need prior authorization from RBI to buy property in India.