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WHY INVEST IN PUNE?
Pune, one of India’s most prominent cities for property investment, boasts high-quality residential properties, IT parks, thriving MNCs and promising start-ups. However, what is it about Pune that attracts NRI investors seeking to expand their wealth?
Pune has established itself as more than just India’s new ‘IT city’ and has experienced significant growth. Multinational corporations from various sectors such as automotive, information technology, biotech, FMCG, and food are expanding their presence throughout the city. Additionally, the ongoing Pune Metro project and the proposed new airport at Purandar (just 45 min. from Pune) are expected to enhance the city’s reputation further. As a result of these developments, residential communities and integrated townships have been thriving in Pune.
Over the past decade, Pune has become an attractive destination for individuals, families, and companies looking to purchase property due to its close proximity to Mumbai. The industrial, manufacturing, and IT sectors have contributed significantly to the high demand for commercial projects in Pune. Furthermore, the convenience offered by the Pune-Mumbai Expressway has strengthened the idea of a ‘Pune-Mumbai Twin City’ growth concept.
Infrastructure growth in Pune
Pune is part of India’s ambitious ‘Smart Cities’ project and boasts excellent social infrastructure, prestigious educational institutions, and convenient connectivity to major cities. As a result, it is the ideal choice for investors looking to maximize their returns. It’s no surprise that residential properties, commercial offices, shops, and showrooms in Pune are in high demand.
General FAQs
An NRI can acquire any property in India, according to Reserve Bank of India (RBI) regulations. Any Person of Indian Origin (PIO), an individual who is not a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Nepal, Iran, or Bhutan, can purchase immovable property in India if he/she held an Indian passport at any time or (ii) his/her father or grandfather was a citizen of India under the Indian Constitution or the Citizenship Act, 1955.
- A pan card (Permanent account number)
- OCI/PIO card (if applicable)
- A passport (In case of NRI)
- Passport-sized photos
- Address verification
In most cases, an NRI/PIO cannot purchase agricultural land, plantation property, or farm buildings in India. Proposals to purchase such land must be explicitly approved by the RBI in collaboration with the Government of India. They can only obtain agricultural land by inheritance.
In India, an NRI/PIO can purchase up to two residential homes. This is because if an NRI purchases two homes, repatriation of cash from an NRE account is not permitted for more than two residential properties. If the funds come from a rupee account, the individual must keep the money in the bank or even in India for ten years.
Funds can be transmitted to India from overseas via standard banking channels or via balance in an NRE, NRO, or FCNR account when making a property purchase payment.
Here are the top three reasons why NRIs should consider investing in Indian real estate:
- Since there is no limit to the number of properties that may be purchased, NRIs can invest in as many residential properties and commercial properties in India as they like and receive rental income from them.
- These investments provide substantial returns on a small initial commitment.
- There is also the benefit of seeking tax deductions on income earned from property investments in India.
Delays in the conclusion of real estate projects have long been a source of concern in the Indian market, resulting in one’s cash being trapped for years. However, with RERA in place, a real estate developer is now required to deposit 70% of the capital money gathered for a project in an escrow account, which is subsequently released as the project advances. One of the most important criteria in establishing confidence in NRI investing alternatives in India is the transparency of monies employed.
Any rental income from a property expansion in India is considered income earned in India and is taxed, regardless of the person’s residency status. The investment can provide rental income as well as short- and long-term financial gains. After just a standard deduction of 30percent TDS from rental income, the remainder is added to total income and taxed at usual rates.
In terms of capital gains, if an NRI sells his or her property after two years after the acquisition, the proceeds are deemed short-term capital gains and are taxed at the corresponding slab rate. If, on the other hand, the property is retained for more than two years, the advantage will be long-term capital gains that will be taxed at a rate of 20% after indexation.
If you want to secure a home loan, now is a wonderful time to buy a property because interest rates are at an all-time low of 6.5 percent in some institutions. For any real estate acquisition, a loan worth up to 80% of the property price is available. Banks provide loan payback terms of up to 30 years; however, the loan balance is determined by the individual borrower’s profile.
According to RBI guidelines, if the property was obtained through conventional banking channels/by debit to an NRE/FCNR (B) account, the sum to be repatriated should not exceed the amount paid for the property.
If the property is purchased in rupees, the NRI/PIO is entitled to remit up to USD one million each fiscal year from the balances kept in the NRO account.
Rental income from the property is repatriable following RBI regulations. Rental income is taxable and requires confirmation from a certified accountant.
