Under What Conditions Do NRIs Get A Home Loan In India?

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Under What Conditions Do NRIs Get A Home Loan In
India?
Mar 2018
In Green Homes
The non-resident Indians have always shown some
deep interest in the Indian real estate market.
Similarly, be it the affordable homes or the
luxury properties, the realty developers have
considered the non-resident Indians as an
integral target segment for the pitching the
project. The home loan, however, remains the pain
point for the non-resident Indians as the
formalities as well as documentation which is
involved in the process is pretty complicated.
Eligibility criteria-
The applicant should be minimum of 18 years
of age (this might differ from one bank to
another) with some regular income source. The
complete income can actually be calculated by
clubbing the income of the co-borrowers or
guarantors and the expected rental income on the
proposed property is actually permitted.
Passport should be valid for the applicant.
Applicant should have actually been employed
abroad for minimum 2 years or should be serving
the valid job contract for a minimum period of 2
years abroad. The applicant who has served for
the month's government agencies abroad can apply
for the loan.
Some banks do have minimum income clause for
granting the non-resident Indian home loan.
The applicant should also be an existing NRO/NRE
account holder with the lender. Document
required Apart from what is required for the
regular home loan, the non-resident Indians
require submitting the following mentioned
documents to the bank to process the home loan-
Copy of work permit/visa Copy of relevant
pages of the passport Power of attorney. It
is required as the borrower isn't based in
India A driving license that is issued
abroad Utility bills such as telephone,
electricity, gas connection, etc. Original
copy of fresh overseas bank account that shows
the overseas address National identity card
of the labor card or social card issued by the
government at the country of residence
2
Bank account statement that shows salary credit
for the last 6 months
Salary slip/certificate for last 3 months
Duly acknowledged copy of the previous year
individual tax returns Appointment
letter/employment contract/ offer letter or any
other document/ agreement that shows the present
term of employment The processing fee Generally,
private banks charge 0.5 of the loan amount and
the applicable good and service tax with the
surcharge. The government banks charge 0.25 of
the amount of the loan as the processing
fee. There are other charges that would be
applicable as well if the loan gets approved but
the amount has to be sanctioned yet. These would
include Valuation report charges
Property insurance premium Stamp duty
payable for loan agreement as well as mortgage
Due diligence charges include a fee of advocate
and title investigation report Repayment modes As
per the RBI regulations, the repayment of the
home loan by non-resident Indian should be done
by making use of the local currency. Also, the
applicant can repay the loan by making use of the
rental income that is derived from the property
proposed. Tax benefits The non-resident Indians
can claim the income tax benefit in India on the
income from the house property. A standard
deduction of 30, interest paid on the home loan,
property taxes, on the home loan is allowed for
non-resident Indians. Also, the NRIs are allowed
a deduction for stamp duty, principal repayment,
and registration charges under Section 80C of the
Income Tax Act. A tenant, however, pays rent to
the NRI landlord should actually deduct the TDS
at 30.
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