The growth of real estate has made the Indian government put forward continuous effort to boost foreign investment and ease the business operations in India. The guidelines and facilities provided by the government help the residents to easily invest in the construction and development sector and also helps them own independent premises.
FEMA Act 2019
The Foreign Exchange Management Act (FEMA) aids in external trade and payments and also promotes the development and maintenance of foreign exchange market in India. It applies to the citizens of India who are currently outside India and associate branches that are outside India but are a part of the companies or body corporates, registered or incorporated in India.
Now let’s get to know the important section that covers FEMA act; 1: Prohibits dealings in foreign exchange except through an authorised person. The Act restricts unauthorised persons from entering into any financial transaction in India and transfer to acquire any asset outside India. 2: The act puts the responsibility of repatriation on the person residing in India who has any amount of foreign exchange transactions due or accrued and repatriated to India within the specific period and in the manner specified by the RBI.
The objective of the FEMA Act in India The Act consolidates and amends the law relating to foreign exchange to facilitate external trade and payments, and to promote the orderly development and maintenance of foreign exchange in India. It broadly covers all matters related to foreign exchange, investment avenues for NRIs such as immovable property, bank deposits, investment in shares, units and other foreign direct investment in India.
Wondering about the facilities for NRI in India? Real estate sector in India invites a lot of attention from all quarters! Thanks to the FEMA act, the policy invites the non-residents of Indian nationality’ or ‘people of Indian origin residing abroad’ with several facilities without losing their status as ‘foreign citizen’.
Here are some important FEMA guidelines that every NRI should know: 1.) Bank Account Maintenance If you are an NRI, it’s important to open bank accounts that are designated only for NRIs. These include: An NRO account – An account to send money earned abroad back to India An NRE account - For repatriable or moveable, assets, such as securities and cash. An FCNR account – It stores money in foreign currency. Both NRO and NRE are only used for rupees.
2.) Understand the financial investment options
Consider it one of the greatest advantages! NRIs are allowed for unlimited investment in repatriable or non-repatriable transactions. The only exception to this is small savings schemes or Public Provident Fund that aims to mobilize small savings by offering an investment with reasonable returns.
3.) Owning and transferring immovable properties All NRIs can purchase all types of residential and commercial real estate in India. The exceptions are the following: Agricultural land Plantation Farm homes