Skip to main content

NRIs Guide to Renting a Home in India

If you are an NRI who has purchased property in India for rental income, you should know about these four aspects:
1.      Rent Proceeds
The rent proceeds can be credited to the NRE or NRO account. Rent proceeds received in these accounts can be freely repatriated. If you do not have an NRE or NRO account, the proceeds can also be directly remitted abroad but you would need an appropriate certificate from a chartered accountant certifying that all taxes have been duly paid.
2.      Tax Implications
If you are getting a rental income from the property you have bought in India, you are liable to pay the tax in India, irrespective of which country you reside in currently.There are some deductions you can avail of. In order to ascertain how much of your rental income is taxable consider the following deductions in the first place:
·         Standard deduction at the rate of 30 percent on the taxable value
·         Taxes paid to the municipal authority with respect to the concerned property which has been rented out
·         Interest paid over a loan availed of for the purpose of construction, repairs or renewals of the property.

3.      Rental Agreement

Before making a rental agreement, proper tenant background verification is essential. You should also notarize all house rental agreements. It helps you as well as your tenant: Section 49 of the Registration Act states that an unregistered rental agreement will not be admissible in evidence, so it is a must stop. Also, a registered agreement is treated as a proof of address which your tenant can use to get a new phone or gas connection. Other than that, an NRI should also draft a clear chart as to how and when the rent will be increased and what kind of inclusions and exclusions in the rent, you want to address.

4.      Power of attorney

A Power of Attorney (PoA) can act as your point of contact and assure you that you will get your rent on time every month. You can also execute a power of attorney (PoA) through the Indian Embassy through Legalizationin which signatures of the notary or judge before whom the POA is executed are required to be authenticated by the duly accredited representative of the Indian Embassy/Consulate. In Apostalization, the deed of POA executed outside India are governed by the Hague Convention, 1961. Also known as super legalization, an apostille is a certificate which confirms and verifies the signature/seal of the person who authenticated the document. It is not necessary to always issue the power of attorney to a lawyer, you may also issue it to a friend or relative who can oversee the complete house rental procedures without getting into the hassles.

The information provided in this article is generic in nature and for informational purposes only. It is in no manner can act as a substitute for specific advice in your own circumstances. We strongly recommend you to seek professional guidance pertaining to your query or doubt.

Comments

Popular posts from this blog

The Pushkar Mela 2019

The Pushkar Mela also is known as the Pushkar Camel Fair is a unique celebration of the beauty of the coveted “ship of the desert” – the camel along with some other cattle. It is estimated that more than 2 lakh people from all around the world visit this unique mela, which mainly focuses on trading camels and cattle, camel races which are the main attraction and a variety of other cultural performances and art exhibits. This year the dates of the Mela (Fair) are from 4th to 12th November 2019. The Pushkar Mela is also a holy pilgrimage for Hindus, pilgrims that visit Pushkar come to take a holy dip in the Pushkar Lake and offer prayer to Lord Brahma, the deity residing in the temple at Pushkar. It is said to be the only temple of the deity in the country, which makes it an important pilgrimage spot for people of faith. The Pushkar Mela creates a grand event cherished with a huge carnival including an array of musicians, magicians, dancers, acrobats, snake charmers ...

Six Steps for NRIs on How to Invest in Mutual Funds

NRIs can invest in mutual funds in India – as long as they adhere to the Foreign Exchange Management Act (FEMA). Here are few steps that will smoothen your investment process: 1.       Open an Account An NRI needs to open an NRE or NRO account. NRIs can invest in repatriable or non-repatriable basis using funds from the NRE or NRO accounts respectively. 2.       Get KYC Done  Even if an NRI has already done a complete Know Your Client process, s/he still needs to do KYC again after achieving non-resident status. Important documents required for NRI Mutual Fund investment KYC includes PAN Card, Proof of Foreign Address Residence, Passport and Cancelled Cheque of NRE/NRO Account. 3.       Two Ways to Invest Once KYC is completed, an NRI can start making investments into domestic mutual funds as an NRI investor.  There are two routes to do that—directly through normal banking channels o...

Can an NRI avail Aadhar Card?

To answer whether an NRI can avail Aadhar Card or not? Unique Identification Authority of India states that“As per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, only a resident who has resided in India for a period or periods amounting in all to 182 days or more in the 12 months immediately preceding the date of application for enrolment is eligible for Aadhaar.”So, if you fulfill these eligibility norms then here are the five steps that you need to follow to avail Aadhar Card: Step 1.  Visit the official website of UIDAI– https://uidai.gov.in/ – and find an enrolment center  authorized by UIDAI to you. Step 2.  Fix an appointment online or visit the enrolment center directly with documents such as resident proof, birth certificate, and PAN card along with the Aadhaar card application form Step 3. After verifying your submitted documents, the official at the enrolment center will take you biometric details (thro...