For quite sometime many of you used to enquire about NRI Investment related tax implications Vs Obligations when you invest in yr Mother Country.

I am glad that an earnest effort was made to consult eminent tax expert and following is a gist of such compilation which I am sure will be helping you in being clear of yr obligations and to have peace of mind. Incase you need any assistance pl do not hesitate to call me in this regard.

All the best in yr wealth creation planning for India.

Yours,

A.V.R Chowdary
09980380000
www.gcglobal.in

FEMA PROVISIONS RELATED TO ACQUSITION OF PROPERTIES:

NRI can acquire immovable property in India other than Agricultural / Plantation property or a Farmhouse out of balance in NRO account or out of repatriation.

PIO can acquire Immovable property in India other than Agricultural/ Plantation property or a Farmhouse out of repatriable funds

NRIs and PIOs can repatriate:

Sale proceeds of immovable property aqcquired in India to the extent of repartiable funds used for acquiring the property, without any lock-in period upto two residential properties.

Refund of application/earnest money/purchase consideration made by house building agencies/seller on account of non allotment of flats/plots/cancellation of booking/ deals for purchase of residential/commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNA(B) account/ inward remittances.

Sale proceeds of immovable properties other than mentioned above can be repatriated subject holding period of 10 years/balance kept in NRO for more than 10 years.

INCOME TAX PROVISIONS FOR NRI RELATED PROPERTIES :

• If an NRI/PIO is having any income in India exceeding Rs.1,00,000/- shall file income tax return before the due date ie.     31st July of every Assessment year for the income of the Financial year.
  
  
• Any person is liable to pay tax under the income tax Act, is required to obtain Permanent Account Number (PAN)
  
  
• If any person is holding any residential/commercial property in notified cities in India, filing of return is mandatory even    though the income does not exceed Rs.1,00,000/-
  
  
  
• Deduction of 30% towards repairs and maintenance, corporation tax paid and Interest on borrowed funds for the purpose    of purchase of Property shall be deducted from the rental income to arrive the taxable income. Effectively 70%    (approximately) of the Rent received is subjected to tax.
  
  
• Gain arising out of sale of properties is subjected to 20% tax as against 30% marginal rate of tax. Capital Gain if invested    in specified asset/bonds within specified date shall be entitled for deduction from gain.
  
  
  
• Capital gain arising out of sale of residential Properties, if invested in another residential house is not liable to be tax.
  
  
  
• Properties both residential and commercial, if let out for more than 300 days in a year is not liable to pay Wealth Tax.