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

Post a Comment

Popular posts from this blog

Six Steps to Open an NRO account

An NRO (Non-Resident Ordinary) savings account is where you can maintain and manage your income earned in India such as rent, dividends, pension, etc. An NRO account can be opened in the form of a savings, current or fixed deposit account. Repatriation of funds from NRO accounts is permitted by RBI, subject to certain limits. Procedure for opening an NRO account is as follows: 1.       Options The non-resident Indian can convert his/her existing resident account in India to the NRO account or open a new NRO account. Documentary proof that the account holder is a non-resident as defined in Indian tax laws is a prerequisite for NRI accounts. 2.       Difference between NRO & NRE Account Unlike NRE accounts, interest earned on this account is taxed at the rate of 30% (plus surcharge) and other applicable taxes in India according to the ITA. In order to take the benefit of lower rates of tax as per double taxation avoidanc...
Post a Comment
Read more

Everything an NRI needs to know about Investment Options in India

If you’re an NRI looking for investing in India but don’t know the best options, considering the returns here the following investment options for you: 1.       Fixed Deposit There are three types of FD for NRI. NRE FD, NRO FD, and FCNR FD. NRE FD is maintained in Indian rupees. No tax is applicable to NRE FD. The principal and interest earned are fully repatriable. The interest rate applicable to NRO FD is similar to FD taken by Indian residents. Tax is applicable on NRO FD. In the case of NRO FD, only interest amount can be repatriated. NRO FD can be opened for 7 days to 10 years. FCNR FD is a foreign currency FD. This type of FD can be opened by depositing income earned overseas. 2.       Real Estate NRIs can invest in both residential and commercial properties with no restrictions on the amount or size of the property. However, NRIs are not permitted to buy agricultural lands, farmhouse or plantations. However, selling of ...
Post a Comment
Read more

Chennai Corporation Hosts Concert in City Parks!

The Chennai Corporation, along with UNESCO Creative Cities Network, launched a collective that will curate and present unique collaborative performances in parks across the city. Chennai made it to the UNESCO Creative Cities Network (UCCN) for its rich musical tradition in 2017. According to UNESCO, the goal of UCCN is to foster international cooperation among member cities committed to investing in culture and creativity for sustainable urban development, social inclusion and cultural vibrancy. The Greater Chennai corporation earlier this year in July launched the ‘concerts at the park’ initiative at Anna Tower Park. The civic body has planned to host music concerts in which both professional and amateur artists (singers and dancers) will perform every weekend. About 42 such big parks in the city have been identified that have an open amphitheater to take music closer to the residentsand as a way of encouraging Chennai’s unique art and culture in public spaces. More people will be en...
Post a Comment
Read more