Introduction
Investing in Chennai real estate is a rewarding and fruitful option for Non-Resident Indians. NRI property registration in India comes with its challenges, such as legal formalities, property compliance, and security of financial fund allocation. To ease the property registration process, here are several steps to follow as an NRI.
1. Power of Attorney (PoA)
Power of Attorney (PoA) is important when the NRI is not in India legally or physically because it allows the person who has the PoA to legally defend the NRI’s financial interests. This is important because there are many property dispositions that only require one person to appear for property-related transactions on behalf of the NRI.
How to obtain a Power of Attorney?
1. Create the PoA with assistance from a lawyer.
2. Notarize the document in the NRI’s country of residence.
3. Have the document confirmed by the Indian Embassy or Consulate in the country where the NRI resides.
4. Send the document to India to be registered at the Sub-Registrar’s Office.
NRIs with the PoA and the subsequent registration do not have to be physically present in India for any property registration-related matters.
2. Verify Property Documentation
Conducting thorough due diligence is necessary to mitigate the risk of fraudulent activity. Non-Resident Indians should validate that, at minimum, each property document has been legally verified before registration.
Considerations on the documents to review:
Title Deed – Document demonstrating that the seller is the rightful owner of the property.
Encumbrance Certificate (EC) – Document demonstrating that the property is free of any legal disputes or pending amounts owed.
Patta & Chitta – Document evidencing ownership (as applicable to land properties).Approval Documents – Document verifying that authorities have approved the property (as applicable to an apartment or a plot).
Tax Receipts – Documents evidencing that no property taxes were owed on the property.
Hiring a legal professional to conduct this review process will help the potential buyer to diminish the risk of fraud and property ownership disputes.
3. Tax and Compliance Considerations
NRIs purchasing property in Chennai must comply with tax regulations in India, as well, during the registration process. Non-compliance with tax obligations can lead to legal complications.
Tax considerations include:
TDS (Tax Deducted at Source): NRIs are obligated to deduct TDS at 1%. If the purchase price is over ₹50 lakh.
Capital Gains Tax: Tax would be applicable if the NRI sold the property at a profit.
GST (Goods and Services Tax): Tax would be applicable on any under-construction properties.
Repatriation Rules: If selling the property, the funds earned must be available for repatriation and must comply with rules defined by the RBI (Reserve Bank of India).
A tax professional would help the NRI understand these aspects of a property transaction.
4. Legal Assistance
Given the intricate legal processes involved in property registration, it is strongly suggested that you hire a real estate attorney.
Advantages of Legal Assistance:
Drafting and reviewing contracts.
Ensuring uncomplicated PoA implementation.
Confirming property documentation.
Managing legal disputes or claims regarding the property.
A legal representative ensures that everything involved in the transaction is legitimate and consistent with all property laws of India.
5. Secure Financial Transactions
NRIs should practice caution in real estate transactions in terms of funds disbursements, for their safety, and state documentation of the financial transaction!
Safe Payment Methods:
Bank transfers – preferably from NRE/NRO.
RTGS/NEFT – direct transfers rather than cash payments are more transparent!
Do Not Use Cash Transactions - Make sure every payment is documented!
Loan Processing – If you are effecting a loan, take care to comply with all RBI standards for these transactions.
Following these measures ensures financial security and prevents legal disputes regarding payments.
Buying property in Chennai for NRIs can be complex, but the right measures can make it easier. Appointing a PoA, looking into property documents, tax compliance, getting legal help, and using secure transaction methods will contribute to the overall hassle-free, seamless, and smooth property registration process.
Comments
0 comment