Guide to Real Estate Woos of NRI’s: Best Real Estate Attorney Advice in India

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Legal Advice & Solutions for NRI’s & their Estates & Properties in India-10: Best NRI Legal Services in India
What are the challenges NRIs encounter when investing in India?
The following are some difficulties or obstacles NRIs encountered when making investments
Investment Restrictions: NRIs may encounter various restrictions and regulations, as was previously said, and the procedure for doing so may be a bit challenging with regard to investing in the Indian market. An NRI located in the United States of America, for example, must be informed about the mutual fund companies that are active in India and must be permitted to invest in the aforementioned fund companies. This is necessary because mutual fund companies must complete a significant amount of paperwork and comply with numerous regulations before they can accept investments from NRIs living in Canada and the United States of America. This is done after they apply for the “Foreign Account Tax Compliance Act (FACTA)” related to the investment. Due to this rule, a small number of mutual fund companies operating in India allow investments from NRIs who reside in the United States. Additionally, NRIs who are citizens of another nation must confirm where they now reside by presenting the necessary documentation.

Minimal Diversification: The typical fixed investments made by NRIs in India are Real Estate, Fixed Deposits, Gold, etc. As a result, diversifying investments made across several classes is difficult. In this regard, some of the frequent issues that an NRI may experience include Transactional Compliances, Complex Web Regulations, and Lack of Knowledge or Awareness of the Indian Market. An NRI may have a little amount of interest in making additional ventures in India as a result of the difficulties listed above. NRIs may have access to a variety of options, including “Mutual Funds, Exchange Traded Funds (ETFs)”, “Direct Equity, Initial Public Offerings (IPOs)”, “Non-Convertible Debentures (NCDs)”, etc., from which to select the investment strategy delivering the highest returns.

Digital Assets: NRIs who are familiar with technology are often more likely to be interested in investing a sizeable sum in digital assets like cryptocurrencies and “non-fungible tokens (NFTs)”. They cannot, however, proceed with investing because of uncertainty surrounding the legal standing of such digital assets in India. NRIs typically invest a small amount to ensure that their investment portfolio is not at danger from volatility.

Lack of Knowledge of Legal Rights: There may be situations where an NRI wishes to invest in Indian real estate but is uncertain of their legal rights. Sometimes, NRIs may encounter fraudulent actions, such as fraudsters buying unlawful lands, and as a result, they may suffer significant losses. To resolve such concerns, the NRI must only work with licenced real estate agents based in India.

Double Taxation/Tax Avoidance: One of the biggest issues NRIs confront is tax avoidance or double taxation. Any income earned and received by NRIs in India that exceeds the threshold must be reported to the government as income tax under Indian tax laws. This includes income from capital gains, interest from fixed deposits and NRO accounts, dividends from mutual fund investments, rent received, and other types of income. As a result, there may be instances where NRIs pay double tax in some nations. Simply put, NRIs may be obliged to pay double tax in both the nation in which they now reside and India.
India has made particular preparations by signing a tax treaty called a “Double Taxes Avoidance Agreement (DTAA)” with over 90 nations worldwide in order to lessen double taxation on NRIs. The aforementioned pact aids in addressing the issues of double taxation and NRI tax evasion. The above-mentioned agreement or treaty mandates that NRIs pay taxes in either India or the country in which they now live. This implies that an NRI is exempt from paying taxes in their country of residence since they have already paid taxes on their capital gains income from sources in India. The aforementioned solutions might thus be a huge comfort for NRIs who reside abroad. Additionally, it might be difficult for an NRI to stay current with the most recent changes and revisions to Indian law. Therefore, it is usually advised for an NRI to speak with a competent legal counsel about their taxes eligibility before to delivering the money to the seller or signing any paperwork, especially in the event of a real estate transaction.

Delay in Process: An NRI may occasionally express dissatisfaction with the investing process because to the extensive background investigations required, which can cause service delays and take a lot of time. These problems are typically encountered by NRIs when investing in “NRO, FCNR, or NRE” accounts. Because of this, NRIs must employ the services of a bank that enjoys a solid reputation in the community and is easy to deal with.

Absence of Professional Guidance: The majority of NRIs’ problems are caused by questionable counsel who are adept at taking advantage of them. Having a trustworthy and dependable professional source of assistance is crucial. The best course of action is to get counsel from reputable attorneys who can provide excellent answers for income tax returns, mutual funds, tax deducted at source, real estate investments, tax planning, etc.

Discrimination based on Income: NRIs are subject to considerably different tax laws than Indian citizens. Taxes are not imposed on foreign income in accordance with Indian income tax laws, however tax reporting is quite complex. Simply put, the TDS regulations are strict and NRIs do not get the same tax benefits as Indian residents. Therefore, before making an investment in India, a taxpayer should follow the rules. To ensure the future and reap financial rewards from investments made sooner or later in a hassle-free manner while seated overseas, it is important to go in the proper route.
Authored By: Adv. Anant Sharma, Vikrant Rathore & Lehar Saini

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