Acquiring a real estate asset is an aspiration of almost every human being and Non-resident Indians (NRIs) are no different.They also like to make investments in immovable assets in India. However, NRI property transactions cannot be realized successfully if all necessary documents are not provided by the involved parties. The documentary requirements of such people are different from those of resident Indian citizens. In order to avoid NRI property disputes, it is necessary to know about all the necessary papers that must be furnished by a non-resident. Following is a list of the documents that an NRI must possess in order to successfully close a property transaction:
One of the most essential documents needed by an NRI to indulge in real estate transactions is a passport. NRIs having an Indian passport are not required to take an approval from the Reserve Bank of India before buying a property. They are also allowed to purchase residential as well as commercial assets. PIOs and OCIs who are foreign nationals must also show the passport of their country for such purposes. However, NRIs, PIOs, and OCIs cannot buy any kind of agricultural land, farmhouses, or plantations. They require special permission from the Reserve Bank of India if they wish to invest in such an asset.
2. PAN Card
The Permanent Account Number (PAN) card is a mandatory document for all Indian citizens looking to make any kind of specified high-value transactions. It helps agencies to track all kinds of taxable income in the country. Most NRIs do not need to pay taxes in India as they are already paying income tax in the country of their residence. However, they require a PAN card for conducting real estate deals in the country. The document is necessary as it can be used for applying for tax exemptions after a sale and also to pay taxes if the property is used for earning rental income.
3. Proof of Address
Documentary proof supporting an NRI’s address in India as well as his/her foreign location must be provided during real estate deals. Such an individual can present a utility bill like electricity, telephone, piped gas etc. as the Indian address proof. Ration card and LIC policy can also be given as local address proof. For fulfilling the overseas address requirement, NRIs can present the same documents or their equivalent issued by a foreign government. They can also give a government-issued identity card like a social security number card or a work permit as their foreign address proof.
4. Tax Returns
In case a non-resident has been in possession of an asset for a long period of time and has been earning incomes from it, then he/ she must be paying the relevant taxes. A record of all the taxes paid on the income generated from as immovable asset must be produced at the time of its sale. NRIs have to present their tax returns for the entire period of ownership of the property when they wish to sell it. It will be wise if a non-resident hires a specialist NRI legal services to get assistance on filing tax returns in India.
5. Sale Deed
One of the most important documents required in NRI property transactions is the sale deed of the asset in question. This paper is the proof of ownership of the title to the property. In case the asset has changed hands several times in the past, the deed must be accompanied by the proper chain of title. NRIs selling an asset must ensure that they possess a proper sale deed registered with the sub-registrar of the jurisdiction where the property is situated.
6. Property Tax Receipts
The property tax receipts are vital documents that help in establishing the ownership of an asset. Owners in India are required to pay taxes on their immovable assets. Non-residents must ensure that they pay the property tax on time and maintain the receipts. This will help them in proving at the time of sale that there are no pending dues related to their asset. In case, NRIs are purchasing a piece of real estate, they must ask the owner to provide all tax receipts issued to date.
7. Possession Letter
A possession letter is given by a real estate developer to the first buyer of the property. It contains the date on which the possession of the asset was transferred to the purchaser. This is an important document which changes hand when a property is sold. In case an asset has been sold multiple times, the paper must be with the present proprietor. Banks and other financial institutions also ask for this document while processing a loan application.
8. Completion And Occupation Certificates
The local authority designated for monitoring real estate development in an area grants a completion certificate to a developer after ascertaining that the project has been completed according to the approved building plan. The Occupation certificate is issued by the authority after establishing that the project is ready for occupation. NRIs while purchasing an asset from a developer must ask for these documents. In case, they are purchasing it from an allottee or another owner, they must demand the original documents from them. Additionally, they must also request a seller to provide the encumbrance certificate which proves that there are no legal dues attached to the asset.
NRI property transactions need to be handled carefully and it must be ensured that the above-mentioned documents are in possession of the owner while buying or selling an asset. It will be sensible to engage an NRI legal services firm to get assistance and avoid any problems.