The amount of investment that is coming in real estate is giving India a boost in the stock markets. Today if we talk of investment that to in India then we are talking about of game full opportunities but full of rules and implications. With India and its consistent growing economy, investors are reaping the benefits with the ongoing wave. The amount of investment that is coming in Real Estate is giving India a boost in the stock Markets.
In all this there are sections of investors who are either NRI (Non Resident Indian) or of Indian Origin and they too want to reap the benefit of being Indian or of Indian Origin though there are recent declaration of reforms/ relaxations for such stream of investors by Indian government.
As per the income tax implications on house property income in India, it would be dependent on whether the property is kept vacant or let out. In case an NRI has only one property in India and if it is kept vacant, then it would be possible to say that there should not be any rental value for such property as the NRI was not able to occupy the same owing to his employment, business or professional carried out at any other place.
However, if he owns two properties and both of them are kept vacant, then he is required to pay income tax on one of the properties as if the property had been let out. The tax laws do not provide clear guidance on how the rental value is to be determined for such property. However, the NRI repatriation of sale proceeds of immovable property in India is as taxable as it’s require transfer of money thus bound to have foreign exchange making it under FEMA rules and policies.
There is also other schemes that might help an NRIs in tax exemption under FEMA for having property in India, the portfolio investment India scheme allow NRIs/ PIOs to invest in stock market or debentures in India.
It all together a different ball game when an NRI has to pay for the tax. Under the Indian tax law, the payer is required to withhold tax on rental income paid to a non-resident @ 30.6% where the income of the non-resident does not exceed Rs 10, 00,000, otherwise at 33.66%. In case an NRI wishes to have a lower rate, then he has to apply to the tax authorities in a specified format for obtaining a certificate for deduction of tax at lower rate. Under NRI Tax processing an NRI would be required to file a return of income at the end of the year if the taxable income exceeds Rs 100,000.
It’s not the income an NRI has to take care of wealth tax also. Wealth tax is levied on the value of specified assets in excess of Rs 15, 00,000. Specified assets include house property. However, the Wealth Tax Act provides an exemption in respect of one house property. In case of more than one property, the NRI would have to pay wealth tax @ 1% on the value (value determined based on the prescribed valuation rules) in excess of Rs 15, 00,000 and file the required return.
In all this there are sections of investors who are either NRI (Non Resident Indian) or of Indian Origin and they too want to reap the benefit of being Indian or of Indian Origin though there are recent declaration of reforms/ relaxations for such stream of investors by Indian government.
As per the income tax implications on house property income in India, it would be dependent on whether the property is kept vacant or let out. In case an NRI has only one property in India and if it is kept vacant, then it would be possible to say that there should not be any rental value for such property as the NRI was not able to occupy the same owing to his employment, business or professional carried out at any other place.
However, if he owns two properties and both of them are kept vacant, then he is required to pay income tax on one of the properties as if the property had been let out. The tax laws do not provide clear guidance on how the rental value is to be determined for such property. However, the NRI repatriation of sale proceeds of immovable property in India is as taxable as it’s require transfer of money thus bound to have foreign exchange making it under FEMA rules and policies.
There is also other schemes that might help an NRIs in tax exemption under FEMA for having property in India, the portfolio investment India scheme allow NRIs/ PIOs to invest in stock market or debentures in India.
It all together a different ball game when an NRI has to pay for the tax. Under the Indian tax law, the payer is required to withhold tax on rental income paid to a non-resident @ 30.6% where the income of the non-resident does not exceed Rs 10, 00,000, otherwise at 33.66%. In case an NRI wishes to have a lower rate, then he has to apply to the tax authorities in a specified format for obtaining a certificate for deduction of tax at lower rate. Under NRI Tax processing an NRI would be required to file a return of income at the end of the year if the taxable income exceeds Rs 100,000.
It’s not the income an NRI has to take care of wealth tax also. Wealth tax is levied on the value of specified assets in excess of Rs 15, 00,000. Specified assets include house property. However, the Wealth Tax Act provides an exemption in respect of one house property. In case of more than one property, the NRI would have to pay wealth tax @ 1% on the value (value determined based on the prescribed valuation rules) in excess of Rs 15, 00,000 and file the required return.
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