The Indian real estate market is witnessing a significant surge in interest from non-residential Indians (NRIs), fueled by robust economic growth and ongoing infrastructure developments. This growing enthusiasm is bolstered by recent reforms announced in the Union Budget for FY 2024-25, which are paving the way for increased overseas investments.
Budget Reforms Drive NRI Investment
A key highlight of the Union Budget is the proposed simplification of the Income Tax Act, promising fiscal benefits for NRIs. This reform is expected to act as a primary catalyst for NRI investments, as income tax regulations form the backbone of the investment framework.
Furthermore, the government is set to ease Foreign Direct Investment (FDI) norms and Overseas Investment regulations. This move aims to attract both individual and institutional investors from abroad, enhancing the appeal of the Indian real estate sector. Notably, listed securities under the Portfolio Investment Schemes will now benefit from a concessional tax rate of 12.5%, with a reduced holding period of 12.5 months, adding to the sector’s attractiveness.
Infrastructure Investments Boost Appeal
The budget has earmarked ₹3.5 trillion for infrastructure development in 2024-25, reflecting a strong focus on improving connectivity and quality of living across India. Enhanced infrastructure is expected to drive up real estate investment attractiveness, making it an appealing option for NRI investors who value both financial returns and sentimental connections to their home country.
Guidance for NRI Investors
For NRIs considering real estate investments in India, thorough research is crucial. Understanding market trends, property values, and legal requirements in targeted locations can facilitate informed investment decisions. It is advisable to seek credible legal counsel and professional advice from experienced realtors to ensure legal clarity and avoid potential conflicts.
NRIs must also be aware of tax implications, managing obligations in both India and their home countries. Additionally, analyzing currency exchange risks is important for assessing the impact on investment returns.
Investing in properties developed by reputable and well-established builders can mitigate risks related to construction quality and project delays. NRI investment authorities in India can offer valuable insights and support to navigate the complexities of real estate investments.
With these developments, the Indian real estate sector is poised to capture a significant share of NRI investments, further boosting its growth trajectory and contributing to the nation’s economic advancement.
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