Documents Required For PIO, OCI, NRI Investments In India
NRI investments in India are the most talked about but least understood topic. It is since the rules are just far too complicated. It also applies to the paperwork required to close a real estate transaction. So, if you are NRI planning to do real estate investments in your home country, you must be aware of the documents required to close the transaction.
There are various market instruments available in the country. But, real estate has been a popular choice for NRIs, owing to their desire to own a home in their home country. The implementation of RERA gets expected to boost investments of NRIs in the coming years. So, if you wish to do real estate investing in India while living abroad, the details about the formal procedure and supporting documentation will be useful.
Do not miss How PIO, OCI, and NRIs Can Safely Invest In Indian Real Estate In 2022.
Documents Required For NRIs To Buy Real Estate Investments in India
Can OCI buy property in India? Can PIOs and NRIs buy Indian propertes? Yes. But, they must follow the RBI guidelines for NRI buying Indian properties. There is also property registration in India for NRI.
- Passport or PIO Card: NRIs face more regulatory hurdles than domestic investors. Thus, NRIs must have the above document required to do investing in the Indian property market. However, if you are a person of Indian origin (PIO) or have Overseas Citizenship of India (OCI), you must present your PIO or OCI cards. An NRI requires a PIO card if he is not a citizen of Pakistan, Nepal, Sri Lanka, Bangladesh, China, Afghanistan, Iran, or Bhutan but holds an Indian ID. You can apply for these cards at the Indian Embassy or your country’s foreign consulate. You’ll also need to show your parents’ birth certificates to prove your PIO or OCI status.
- PAN card: Your Permanent Account Number (PAN) card is required if you intend to lease out the property you have purchased. Furthermore, if you plan to sell the property in the future, the capital gains from the sale will be subject to capital gains tax. NRIs must complete Form 49A, which is easily accessible, filed, and submitted online at the websites of UTI Infrastructure Technology And Services Limited (UTIITSL) and National Securities Depository Limited (NSDL) (NSDL). If the NRI’s communication address is within India, a fee of Rs 107 gets levied, and a fee of Rs 989 gets levied if it is outside of India.
- Power of Attorney: As an NRI, you are not required to be physically present in the country to complete a property transaction. Anyone with a ‘Power of Attorney (PoA) to act can complete the formalities on your behalf. The document empowers an individual to act on behalf of the NRI named in the deed. The person who grants the power is known as a Donor, Principle, or Grantor. The person who confers the right gets referred to as a Donee, Agent, or Attorney.
Do not miss NRIs Investing In Indian Real Estate: A Smart Move In 2022?
The Documents Required For NRIs When Applying A Home Loan For Real Estate Investments in India?
NRIs can raise money for their property purchases with inward remittances or funds held in a non-resident account. They can also obtain a mortgage.
NRIs must provide the following documents to obtain a home loan:
- A photocopy of the Indian passport and visa
- But, if an NRI does not possess an Indian passport:
- If you have a foreign passport, you will need a PIO card.
- If your parents are Indian citizens, you can apply for an OCI card.
- Work permit/employment contract/appointment letter from your home country
- Payslips for the previous six months and the most recent salary certificate
- The most recent income tax returns
- Bank statement for the last year’s NRE and NRO accounts
- Report from the country of residence’s bureau
- a power of attorney in the format specified by the bank (in case you are not in the country for executing the purchase transaction)
Documents Required For NRIs To Sell Real Estate Properties in India
“What documents do NRIs need when selling a property?” is the most frequently asked question on Quora. So we spoke with our legal expertise and obtained a list of required documents. The documents required for NRI to sell properties are
- Passport: If an NRI wishes to sell properties in the country, he must have a passport, albeit not inevitably an Indian passport. It will be evidence of the individual taking part in the transaction. . A passport performs the same function for OCIs and PIOs.
- PAN Card: Many NRIs do not have to pay taxes in their country, India because their revenue is subjected to taxation in the countries where they reside. NRIs must get a Permanent Account Number card if they plan to purchase real estate in the country. An application for a tax deduction certificate is necessary after the property gets sold. PAN numbers get issued to NRIs who have an address abroad in certain countries.
- IT Returns: An NRI holds an estate property for a time [period and also reaps money by leasing it. This money attracts tax. The IT returns of property ownership should get kept on hand.
- Address Verification: An NRI must provide documentation to support her Indian address and abroad. It can be ration cards, phone or electric bills, and life insurance statements. These also get required as valid authentication of address abroad.
- Agreement of Sale: Sale deeds, which also serve as the main evidence of ownership, is an essential document in the process. It is a legal document that an NRI executes when they invest in or buy incompleted properties in the country.
- Allotment Letter: Allotment letters should be issued by the builders, societies, or any authorities. Thus, it confers ownership to the named individual in the letter.
- The Society’s Documents: Letters from the societies get required for a green flag to the procedure of sales for the apartments in a specific locality. According to this document, the NRI cannot have any society’s pending debts. Copies of the society’s membership are also required to prove ownership.
- Occupation Certificate and Building Permit: Copies of any authorized buildings plan gets required when you want to sell the buildings. But, occupation certificates are also get needed to prove the building has gotten occupied. It needs to get approved by the building society or builder.
- Certificate of Encumbrance: An encumbrance certificate is required to ensure the properties have zero outstanding debts. It is critical when purchasing an apartment.
Do not miss Transferring Immovable property by NRIs: everything you must know.
It would also be beneficial if an NRI could provide documentation of certificates of property tax. A cautious buyer may request it.
But if there is an absence of originals of the documents, the seller must seek the assistance of a lawyer, who will provide him with a certificate proving that he is the rightful owner. The lawyer will conduct his research and obtain a title report for the property. Once he gets convinced, he will issue a public notice in an English/Hindi newspaper and a regional language and wait for the specified time to see if anyone claims ownership. When the lawyer is convinced, he will issue a certificate stating that the seller is the rightful owner.
Do you want to do some investing in real estate? Assetmonk is a premium investment platform that connects investors to real estate investments opportunities that yield high returns. This platform acts as a conduit for NRI investing in real estate property. It offers high-grade real estate opportunities in the country for reasonable prices. It also saves the time of investors by removing the time-consuming and futile process of looking for the best property.
Documents Required For PIO, OCI, NRI Investments In India FAQ'S:
Whenever an NRI sells a property, the buyer should pay a TDS of 20%. If the property gets sold within two years from the date of purchase, a TDS of 30% will get levied.
NRIs who own properties in the country can benefit from a Power of Attorney (POA). NRIs require someone to act on their behalf and complete the formalities because they cannot be physically present to handle financial and legal transactions.
A Power of Attorney (POA) is essential for estate property transactions of NRIs. According to the Registration Act of 1908, when an NRI sells or purchases a house property, both parties must be physically present while the transaction is registered.