Non-residents Indians have recently begun to show immense interest in the real estate market of India. A lot of NRI funds are coming to India, through various channels, to be invested in the real estate industry, as these NRIs want make the most of the opportunities offered by the growing real estate market in India.

The Indian government has played a major role in supporting the growth of the real estate sector by allowing NRI investment and Foreign Direct Investment in real estate. With an exceptionally good return on the investment, the real estate sector has become the preferred choice of most of the investors.

Various lucrative avenues are being created and offered to invite maximum investments from abroad. The NRI section has responded quite positively, showing keen interest in India's real estate market. NRIs are investing a lot in residential and commercial properties to cash upon the increasing property demands.

NRIs are also allowed to participate in real estate investments by way of huge investments in the construction of residential and commercial projects, development of townships at city and regional level, constructing infrastructure facilities like roads and bridges in urban areas and investment in participatory ventures. The status of an NRI as a property owner is not much different from the Resident Indian; just like any other property owner, NRIs pay property tax to the concerned authorities, though NRI property tax is slightly different from what Indian residents pay.

NRIs also get complete support from the financial institutions and banks for the finance required for the purpose of investment in properties in India. NRIs are eligible for availing a home loan facility to purchase a property in India; in fact they are considered as quite a safe profile due to their good repayment capacity. As far as the process of the repayment of the home loan is considered, it can be made through a normal banking channel by way of inward remittance. It is also possible to repay by way of direct debit into the accounts of Non-residents (External) or Non-resident Indians who earn an income in India through rent, dividends, pension, etc . Online banking in India, and these special accounts for NRIs, have facilitated transactions for any kind of NRI investment in India.. Online banking in India, and these special accounts for NRIs, have facilitated transactions for any kind of NRI investment in India.. Online banking in India, and these special accounts for NRIs, have facilitated transactions for any kind of NRI investment in India.. Online banking in India, and these special accounts for NRIs, have facilitated transactions for any kind of NRI investment in India.. Online banking in India, and these special accounts for NRIs, have facilitated transactions for any kind of NRI investment in India.
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  • Govt may free NRIs from farmland purchase restrictions

    Non-resident Indians (NRIs) may soon be freed from restrictions on buying farmhouses and small plantations. This piece of good news for overseas Indians, looking to diversify their investment portfolios, is accompanied by the results of an Assocham study which estimates a pumping in of $8bn in the Indian real estate sector this year.

    India's Foreign Exchange Management Act (Fema) does not permit NRI or foreign investment in agriculture and farm sector. Farmhouses are categorised as agricultural land and the bar would have to be lifted to allow investment by NRIs in this segment.

    Through Press Note 2 of 2005 series, the government allowed FDI up to 100 per cent under the automatic route in construction projects including housing, commercial premises, resorts, educational institutions, recreational facilities, townships. However, such investment is subject to conditions of minimum capitalisation and minimum area development. FDI is not permitted in any other segment of real estate sector.

    NRIs, according to Assocham, are investing in immovable property in India. They have been keener in investing in residential properties than commercial Properties. The one very attractive option closed to them so far was farmland and farmhouses.

    Now, the department of industrial policy and promotion (DIPP) is considering a proposal to allow NRIs to buy farmhouses and small plantations in India. A final decision on this proposal is expected in a month and minimum requirements for such acquisition may be stipulated.

    NRIs from all over the world have been urging the government to permit investments in these segments. According to sources, they are even learnt to have approached various area development authorities and municipal corporations seeking farm lands. While discussions are still on within the DIPP, officials of the finance ministry are of the view that investment in farmhouses cannot be categorised as FDI. The final decision on this issue would depend on the views of the agriculture ministry and the Reserve Bank, apart from the finance ministry and the DIPP. At present, farmhouse purchases by NRIs are taking place through convoluted routes. In the name of relatives and friends, NRIs buy farmhouses and the transactions are through forged titles.

    They would certainly be keen to avoid the 'benami' property hassles and make above the board investments in their homeland.
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