Everything you want to know about

NRI's Financial Estate

Why is NRI / PIO /OCI / FNIO Financial Estate Creation important?

For Indians working out of India and falling under these categories, it is essential to realise the need for a financial estate in India which is nothing but a long-term investment plan. There are people who leave the country for work and come back after a decade or two or even more. It is always effective and safe for NRIs to create real estate in India, irrespective of the stability of the country they are working in. This allows them to enjoy an immovable asset in their homeland and have a property here when they come back after years of working abroad. Taru Financial Services will facilitate the financial estate creation process and guide you through the safest and most effective plan there is in the market.

These working-class citizens will have to follow our recommendations and avail a life insurance policy. These policies are hand-picked for each patron differently depending on your period of work and goals. At the end of the life insurance period, the policy matures and the benefits are given to the policy holder who can either keep it in India and invest accordingly to get a guaranteed life-long cash flow or also transfer it to his/her foreign bank account to be used there. This facility of transferring the proceeds of the life insurance policy to the policy holder’s bank account abroad is legally permissible by law.

What are the advantages of investing in India?

  • In countries like UAE where Indians can never become Permanent Citizens, it is always safe to create a financial estate in the homeland, irrespective of the stability of the country they live in.
  • To create a constant source of income once they come back to India after working abroad for many years.
  • India has already signed a Double Taxation Avoidance Agreement (DTAA) with 65 countries, which makes it even easier for NRIs to invest in India. Under this agreement, the income generated in India will not be taxed in the home country of the investor since it will be taxed only once in India. This has come as quite a relief for NRIs who were worried about investing in India and incurring losses due to double taxation.
  • The taxation system has evolved to become more favourable and mature with lower custom and excise duties and low corporate taxes. The recent developments in the taxation system has brought about a number of tax holidays and rebates according to the geographical location and the sector of investment.
  • Introduction of various rules and regulations to protect intellectual property rights such as the Patents Act, Geographical Indicators of Goods Act and the Trademarks Act.
  • Easy and liberal foreign exchange regulations.

What are the tax implications for NRIs on property?

  • During the time of purchase, the NRI has to bear the expenses of stamp duty and that of registration fees. He/she is eligible to avail all the benefits as that of an Indian resident in matters of interest paid on home loan.
  • Standard deduction rates under the IT act are applicable since the income received is from the head of house property. The rates applicable are under the standard tax slab. The NRI has to pay the tax irrespective of whether he is in India or any other country where income is taxable. Although there is one exception where the NRI doesn’t have to pay tax if he/she is living in a country which has double tax avoidance agreement with India.
  • There is also an advantage that the amount paid on the home loan interest by the person in question is deductible under NRIs taxable income without any limit on the upper slab. NRIs are legally obliged to pay the respective taxes under capital gains tax of Income tax act when he/she sells the property

What kind of real estate investments can an NRI make?

Irrespective of whether its Indians or NRIs, investment in real estate is a big step in the direction of progress. It is suggested that the below mentioned points are kept in mind before signing the papers. FEMA and RBI have made it clear that NRIs are eligible to make investments in real estate. Below are the ways in which an NRI is allowed to invest in real estate.

  • NRIs are allowed to buy any kind of immovable property in India except a farm house, agriculture land or a plantation property.
  • They are allowed to receive any property by inheritance.
  • NRIs can get any property of immovable nature as a gift from an Indian citizen who is not a resident of India.
  • They are eligible to sell the immovable property to any Indian resident.
  • NRIs can gift plantation property, farm house or agriculture to any Indian resident.
  • They are also allowed to transfer ownership of a residential property or commercial to any Indian resident or an Indian citizen living abroad as a gift.