For many years, investing in real estate has always been considered a stable investment, along with many other assets. Moreover, Non Resident Indians (NRIs) have played a major role in the boom of the real estate market across India. While the NRIs think about purchasing a home in India for a high standard of living, they may also think about the purchase because they might be planning to settle in India in the near future. So, with this in mind, let’s go through why NRIs consider purchasing one of the luxury flats in Mangalore even when they have several investment options.

Why do NRIs consider investing in the real estate market in Mangalore?

There are many reasons why the real estate market is taken into consideration when NRIs consider buying a property in India.

Current Value of the Indian Currency

As NRIs are looking forward to investing in the Indian real estate market, the depreciation in the value of ‘Rupee’ has garnered attention for investment. After an 8.6 percent drop in 2018, people have still observed the depreciation, with a 1.5 percent drop in 2021. Presently, the drop in the value of the Rupee has occurred due to an increase in US interest rates and concerns regarding a global recession. With this scenario in mind, the real estate market is favorable to NRIs because they can now purchase a home at a lower price.

Offers better and potential returns

Whenever NRIs think about investing in the Indian real estate market, they always consider it as a lucrative prospect. The investment not only enables them to diversify their portfolio but also enhances their financial returns. Moreover, the NRIs have also shown interest in purchasing homes spread across a certain area, especially in Tier 2 cities like Mangalore. While the pandemic has changed the dynamics of Indian families, many individuals have now opted to reside with their parents.

High Resale Value

Amidst the present economic and political conditions across the globe, NRIs are now sure that real estate is one of the most stable assets when compared to assets such as gold and shares. In comparison to the debt securities that aren’t performing well, the overall price of gold has significantly increased. On the other hand, as the world still copes with the global recession, the stock market has also faced many unpredictable trends. However, real estate still continues to be one of the best investment options for NRIs in India. This is because NRIs are confident that the sector will give them positive returns for a long period of time.

Favorable market for investors

The support offered by the RBI and SEBI for Foreign Direct Investments is yet another reason why NRIs are thinking about investing in Indian real estate. As per the clauses of the Foreign Exchange Regulation Act (FERA), NRIs can either buy commercial or residential property without seeking any permission from the RBI. Even if the NRI wants to rent the property, the returns will be credited to the NRO account without any hassles. Besides, the NRIs are quite happy with the fact that they can buy as many properties as they want.

Numerous Tax Benefits

Whenever a non-resident Indian has to pay tax on the rental yield, the Income Tax (IT) Act offers several provisions. If the NRI has taken a home loan, then he can claim a 30% deduction, deduct the taxes related to the property, and later use the interest deduction. However, if the NRI is drawing income from the investment in certain assets for which the TDS has been deducted, then there’s no need to file the Income Tax (IT) returns. Besides, there’s also an exemption if the capital gains for the NRI, from the sale of the property, are invested again in some bonds. 

What are the various tax implications for NRIs investing in Indian real estate?

There are several tax implications when an NRI is about to acquire any property. But, before we move ahead with the details, it’s necessary to understand whether the seller is a non-resident or a resident. This type of information can be gathered as per the clauses of the Income Tax Act of India. In case an NRI purchases an immovable property, 1% TDS will be deducted if the sale value considered in those instances is more than Rs 50 lakh. However, if the NRI makes a purchase through a non-resident, and long term capital gain is applicable, then 20% TDS will be deducted. 

While purchasing a property, the NRI should note that short-term gain will only be applicable if the property is sold within a time span of two years. On the contrary, the NRI must also note that long-term gain is applicable only when the concerned individual decides to sell the property after two years. 

Regarding the capital gains tax for NRIs selling properties in India, a tax of 20% is levied on long-term capital gains. But, a tax on short-term capital gains is imposed according to the tax slabs based on the actual income of the NRI. Once the NRI decides to sell the property, the buyer can deduct TDS equivalent to 20%. In such a scenario, NRIs can ask for exemptions on long term capital gains as per the clauses of Section 54, Section 54F, and Section 54EC. Moreover, while the NRI can reap the benefits of the exemptions when he is filing IT returns. He can further claim the TDS that has been deducted on the capital gains.   

Finally, if you’re an NRI, then you must consider purchasing a house in Rohan City. While this project epitomizes luxurious living, it has spacious apartments with world-class amenities. Even after a hectic day, you can simply relax around the lawn or rejuvenate in the swimming pool. Additionally, the commercial spaces of Rohan City have shopping complexes, educational institutes, healthcare facilities, and more. At City Club, you can also expect the lifestyle of your dreams along with modern amenities. Apart from being a testament to contemporary architecture, Rohan Corporation has also earned recognition for thoughtful craftsmanship. Above all, NRIs can certainly expect optimal returns while enjoying a luxurious lifestyle in Rohan City.