Permanent Account Number or PAN
A NRI must apply for a PAN Card for the taxable income in India and the property transactions that he/she will make. The PAN Card can be acquired by submitting Form #49A at the National Securities Depository Limited (NSDL) website along with the desired documents and a very nominal fee.
Non-Resident External (NRE) and Non-Residential Operational (NRO) account
In NRE accounts, you can send the money from overseas but you cannot deposit the money in India in these accounts. You can issue payments from these accounts.
In NRO accounts, you can deposit the amounts you generate as Income by way or Rent, Interest or any other income or sale proceeds.
Any NRI who wishes to invest in a property in India must hold a valid Indian passport. But if he is a foreign country passport holder then he must acquire a Person of Indian Origin or PIO card through that country’s consulate or embassy. The passport should clearly show the Visa stamp and date of entry. But there is an exception to this rule. A NRI who holds his/her birth certificate or the Indian passport of his parents can also invest in a property in India.
Proof of Residence in India/Abroad
A NRI needs to submit substantial documents in support of his address in India. The acceptable list of documents include telephone bill, ration card, electricity bill, LIC policy, cell phone bill or any utility bill. If he is submitting ration card then he needs to furnish one more document in support of his Indian address.
For his overseas residential proof he can submit the equivalent of any of these documents and some additional documents like
a) Identity card
b) Work permit
c) Driving license
d) Social security card
e) Copy of credit card
f) Last 6 months bank statements of all NRE/NRO accounts in India
The NRI may also submit the POA (proof of address) Card from the local Postal Department that serves as both ID and POA proof.
Power of Attorney or POA
The concept of POA is very useful for an NRI as it helps him to purchase and sell a property from abroad in accordance with the RBI regulations. The POA must be executed on a stamp paper as per the norms of the concerned country.
The POA must be signed by the NRI in front of a consulate officer and the signature on the Sale Deed must be attested by the Indian Consulate officer. The NRI must sign on each and every page of the Deed and must send a covering letter with the date mentioned therein.
Bank Loan is advisable, If you are looking for a property in India. Banks safeguards you completely as it does a very strong due diligence on the property. For NRIs, having a bank in the transaction provides immense comfort to the home buyer as sometimes, the commitment by the developers on legal clearances may be in the pipeline as it will help you to avoid if there is any grey area.
Who can apply for NRI Home Loans?
a) NRI, PIO, OCI, except Citizens of Afghanistan, Pakistan, Bangladesh, Sri Lanka, China, Iran, Nepal or Bhutan.
b) Minimum Income: Should be USD 3000/-per month (or equivalent)
c) Age: The minimum age of the applicant should be 24 years. The maximum age limit is 60 years or retirement age (whichever is earlier), at the time of loan maturity.
d) Work experience: The applicant should have a minimum overseas work experience of six months with total work experience of two years.