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In order to encourage more investments from the NRI community in the real estate industry in India, RBI has eased up the regulations for this particular community. The NRIs form one of the most important segments, that drive the real estate sales in India. According to the new set of norms, they can make real estate investments through the automatic route. This process has simplified the automatic process. According to the norms, it is not necessary for the NRI investors to get the approval of the Reserve Bank. Therefore, the NRIs need not approach the Foreign Investment paper Board to obtain the approval of investing in India.
With the new set of norms coming into place, the NRIs are more comfortable in making investments in India. This is likely to boost up the overseas investments in the real estate sector in India. The move comes at a time, when the real estate industry in India is evolving fast. A number of new norms have come into play in the industry in the last couple of years. The introduction of RERA and GST in the real estate sector are among the most important moves that have taken place in the real estate sector. The confidence of the overseas investors has been boosted up, due to the ease of investment.
The new set of norms state that a person of Indian origin, who is presently living outside the country need not seek permission to buy an immovable property. The exception includes only agricultural land, plantation property and farm house in India. For NRIs, investing in real estate in India is one of the most lucrative investments. Apart from this, they prefer investing in shares and fixed deposits. However, the real estate market is less volatile, as compared to shares and stocks. This ensures, that the investors can enjoy a better degree of safety, considering the monetary aspects.
The NRIs, at the time of making property purchases or sales, can carry out the transactions in various ways. The funds are received through the normal banking channels in India, or through inward remittance from any other location outside the country. At times, the funds are held in the account of a non-resident and it is maintained in lines with the regulations, formulated by the RBI. During property transactions, no payment by the NRIs can me made through foreign currency notes or Traveler’s Cheque, or any other form of transaction apart from the ones that have been mentioned here. So long as the NRIs do not deal with agricultural property, they do not need any permission from the RBI. They are also free to rent out property in India, without seeking any permission from the authorities.
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