property special 2012
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Property Special 2012TRANSCRIPT
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Gujarat Samachar & Asian Voicewww.abplgroup.com 3
Everyone has a special affinityfor the ‘Second home’
Most loves to own a second home, and when it is a second home the
preference obviously goes to India. Because it is the country of origin
of British-Indians and also a place of guaranteed sunshine and recreation.
You are emotionally involved in investing in your roots. Moreover the real
estate investment in India have proven to give very good returns.
Some years back, a popular Hindi film titled ‘Roti, Kapda Aur Makan’
launched a phase which actually kickstarted the development of real
estate. Real estate activity in India is quietly laying a brick of solid
foundation. It was a faceless industry about 30 years ago, but has gained
much momentum day by day. The latest Real estate research potential in
India is estimated to rise to $102 billion from $14 billion in the next decade.
As per recent Indian real estate research, the average growth rate returns
is 30%, which sparks the tale of this booming industry. In India especially
in Gujarat a rapid growth in real estate sector has been seen in over last
10 years.
Gujarat as a leading state in India has inevitably a better attraction for
investment in this sector. In last few years the residential-rental sector has
also benefited from better legal framework. If the two million British
Indians, (including one million British Gujaratis) are looking for investment
in their place of birth or ancestral homes, it can be said for sure that
Gujarat is an attractive investment option.
For the readers of this magazine in the UK and other developed
economies, most of whom reside in their own residential properties (in
UK, 85% of British Asians reside in their own houses which are higher
than the national average), owning a property in India is not only an
instinct, but an emotional bonding. Hundreds of thousands of the British
(Let’s call them “white British”) own vacation homes in Spain, Portugal,
Greece and other countries. More and more of British Indogenic people
aspire to have a property (apartment / bungalows) and even farmhouses in
India.
Moreover, the Indian Government has taken steps to attract foreign
investments in the real estate sector. The investor friendly policies
encourage offshore investors to own real estate in India. Concrete steps
have been taken to make real estate investment for NRIs an easier task.
They do not require any approvals and need not have to take RBI’s
permission to buy or sell residential or commercial property in India. To
help NRIs get funds for buying their dream home/property in India, RBI
also allows NRIs to take home loans from any banks located in India.
ABPL team in Ahmedabad has produced a special real estate
magazine, which will be immensely informative and knowledgeable guide
to these segments of potential Investors offshore. I am happy that some
inspiring thoughts are available with a very modest effort in this magazine.
Kunal Shah from Ahmedabad and Manish Shah from Vadodara as well as
other members of ABPL team have worked hard for this magazine.
CB Patel
Publisher/Editor
Asian Voice & Gujarat Samachar
Gujarat Samachar & Asian Voice www.abplgroup.com4
Of all the lofty dreams spun around the India growth
story, none is as compelling as its real estate
narrative. From nowhere in the middle of the last
decade, India’s property market has raced like a horse
on steroids to reach a size of $50 billion and is expected
to grow $90 billion by 2015. Indian real estate business
has taken an upturn and is expected to grow from the
current USD 14 billion to 102 billion in the next 10 years.
In every city and town, an endless row of nouveau riche
has surfaced, having traded their land and buildings for
unprecedented sums. It is proving that that real estate is
the surest way of doubling money.
The Indian real estate industry is emerging as one of
the most preferred investment destinations for global
realty and investment firms, says a study conducted
jointly by the Federation of Indian Chamber of
Commerce and Industries (FICCI), the premier industry
body of India having a membership of more than 1,500
companies and more than 500 chambers of commerce
and business associations, and UK-headquartered
professional services firm Ernst & Young (E&Y), which is
one of the world’s big four accounting firms.
Purchasing real estate in India is a rewarding
transaction observing the ever-increasing inclination
towards property prices. The sky-kissing prices of
housing on top of commercial realties crossways the
nation will positively yield immense returns as an
investment transaction.
We have a saying in India that having land is better
than having a bank balance. It’s actually not a fallacy; real
estate investment has turned around the life of many
individuals. The past decade has been a boom time for
investors in real estate as well as builders. The area
surrounding metros like Delhi, Mumbai, Chennai and
Kolkatta are growing by leaps and bound. What does the
real estate boom say: that growth is in, poverty is out?
The branded realtors of the US like Richard Ellis have
come here to cash in on the boom. Office spaces that
have been developed are state of the art and at globally
competitive prices. Since the city land use is choked
with buildings the suburbs is a welcome shift. The NCR
region has decongested Delhi and made it roomier.
An old Indian saying goes, “land is like mother:
never abandon it for money!” The opposite is now true:
land is money in Indian cities. Because of the huge
compensations that have been given to farmers whose
land has been brought under use for development,
urban land is now worth millions.
The India property effervesces has been
magnetizing mammoth investment in property market
and comprises foremost property fund liberates and
management services. The most important suppliers of
realty news create presented resources to facilitate
investors to investigate realties in cities akin to
Ahmedabad, Surat, Rajkot Mumbai, Kolkata, Chennai,
New Delhi, Bangalore, Hyderabad, Noida, Gurgaon,
Pune, and the reminiscent of. The investors can also
notice the property listings for auction and buy of real
estates in a state-wise method for Kerala, Delhi, Goa
and Gujarat.
Current Scenario of the Real Estate Market in India
Commercial real estate sector is in boom in India. In
the last 15 years, post liberalization of the economy,
Indian real estate business has taken an upturn. This
growth can be attributed to favorable demographics,
increasing purchasing power, existence of customer
friendly banks & housing finance companies,
professionalism in real estate and favorable reforms
initiated by the government to attract global investors. ❖
India’s property market racing like a horse
• Purvi Apurva Shah
Gujarat Samachar & Asian Voice www.abplgroup.com6
The economy of India is the tenth
largest in the world by nominal
GDP and the third largest by
purchasing power parity. India
recorded the highest growth rates in
the mid-2000s, and is one of the
fastest-growing economies in the world. India is the
19th largest exporter and tenth largest importer in the
world. Economic growth rate stood at around 7 to 9%.
Apart from China, India is the only country in the world
that is growing over 7% and has the potential of
growing by 8 to 9 % annually. Even by the estimates of
the World bank, India will grow at 7%.
When the western economies are not doing so well,
and India’s economy is going great guns, it is surely a
matter of pride. Citing uncertainty in global economic
scenario, India aims to achieve 8 per cent annual
growth. While India has confronted persistent
challenges on the external front, still India is doing
reasonably well.
India outstanding in every field
Industry accounts for 28% of the GDP and employ
14% of the total workforce. In absolute terms, India is
12th in the world in terms of nominal factory output.
India is 13th in services output. The Indian retail market
is estimated to be US$ 450 billion and one of the top five
retail markets in the world by economic value.
Tourism in India is also growing fast. India's rich
history and its cultural and geographical diversity make
its international tourism appeal large and diverse. It
presents heritage and cultural tourism along with
medical, business and sports tourism. India has one of
the largest and fastest growing medical tourism sectors.
Mining forms an important segment of the Indian
economy, with the country producing 79 different
minerals. India ranks second worldwide in farm output.
Agriculture and allied sectors like forestry, logging and
fishing accounted for 15.7% of the GDP in 2009–10,
employed 52.1% of the total workforce, and despite a
steady decline of its share in the GDP, is still the largest
economic sector and a significant piece of the overall
socio-economic development of India. In 2008, India had
the world's third largest fishing industry.
India is the largest producer in the world of milk, jute
and pulses, and also has the world's second largest
cattle population with 175 million animals in 2008. It is
the second largest producer of rice, wheat, sugarcane,
cotton and groundnuts, as well as the second largest
fruit and vegetable producer, accounting for 10.9% and
8.6% of the world fruit and vegetable production
respectively. India is also the second largest producer
and the largest consumer of silk in the world, producing
77,000 million tons in 2005.
As of 2009, India is the fourth largest producer of
electricity and oil products and the fourth largest
importer of coal and crude-oil in the world. Coal and oil
together account for 66% of the energy consumption of
India. India's oil reserves meet 25% of the country's
domestic oil demand. Gems and jewellery form an
important part of India’s rich culture. This culture is the
primary reason for a flourishing Gems and Jewellery
industry in India. The numbers also support this
statement. India is the largest consumer of gold, with
• Suresh D. Patel
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Email: [email protected] • Web: www.naconstruction.co.in
Strctural EngineerPreyash Shah
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Architect & DesignerJimmy Rathod
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Gujarat Samachar & Asian Voice www.abplgroup.com8
over 20% share of the total gold consumed in the world.
The overall size of the industry is Rs 12,400 crore. Its
total exports add up to Rs 78,100 crore annually. This
comprises 4% of the global Gems and Jewellery
market. India is also the largest diamond cutting and
polishing centre in the world. On the domestic front the
sales figure equals to Rs 73,500 crore. India is the
fastest growing branded jewellery market in the world.
It is expected to grow at an annual growth rate of 40%.
India also has a vast pool of highly skilled labour that is
available at a low cost.
India is also rich in certain alternative sources of
energy with significant future potential such as solar,
wind and bio fuels (jatropha, sugarcane). India's huge
thorium reserves – about 25% of world's reserves – are
expected to fuel the country's ambitious nuclear energy
programme in the long-run.
India has the world's third largest road network,
covering more than 4.3 million km and carrying 60% of
freight and 87% of passenger traffic. Indian Railways is
the fourth largest rail network in the world, with a track
length of 114,500 km. India has 13 major ports, handling
a cargo volume of 850 million tonnes in 2010. Roads,
Railways, Communication systems have made
significant progress in these 60 years. We have now
able to connect several villages by road network.
Education is the backbone of any country's
development. During the initial years of independence
the percentage of literates was only 30% approx. Today
we have 65% literates and that too with enormous
progress in the percentage of women education.
India best investment destination across the world
India has been one of the leading performers in the
world economy in the recent years and has emerged as
a long term investment destination. With a growing
economy, India is arguably one of the best investment
destinations across the world. India maintains the lead in
economic growth vis-à-vis most peers. In our view,
global investors with a long-term perspective remain
positive about India and would look at sharp corrections
as buying opportunities.
India is fast emerging as a lucrative investment
destination for NRI's because of its growing economy.
Foreign funds are flowing into India and China as they
have been among the few star performers when the
global economy is struggling to emerge out of the
meltdown. With the Indian economy on a long-term
growth curve, the non-resident Indians (NRI's) should
look at multiple investment options to park their funds in
their home country.
China, India are expected to be among the world’s
largest economies by the year 2050. They are among
the biggest and fastest-growing emerging markets with
significant long-term growth potential. Real estate in
emerging markets, in general, can be characterized as
“embryonic and growth oriented.” China, India and
Brazil exhibit such characteristics as accelerating market
growth, industry potential that substantially exceeds its
current volume, and a rapidly growing. Moroever it turns
to be a safe investment. With a billion people, the
Republic of India is the world's largest democracy.
Investment in Real Estate
If you are sitting back and thinking whether it's a
good idea to invest in property and real estate in India?
Then you will be more than happy to know that Reserve
Bank of India has granted general permission to foreign
citizens of Indian origin, whether resident in India or
abroad, to purchase immovable property in India for their
Gujarat Samachar & Asian Voice www.abplgroup.com10
bona fide residential purpose. They are, therefore, not
required to obtain any prior permission of Reserve Bank.
Further, the Reserve Bank has granted general
permission for sale of such property without its
permission. Investment in agricultural land/plantation
property/farm house is, however, not allowed.
Gujarat is preferred to Japan when it comes to investment
Real estate in India is perhaps one of the most
vibrant and ever growing sectors of the country with
seemingly limitless opportunities. India figures in the list
of one of the real estate markets every global consultant
of repute recommends to invest. Gujarat is considered
to be the most favoured destination of Investment.
Look at the following factors while including a city in this list:
∙ Availability of resources -Infrastructure development
∙ Connectivity with key economic centres
∙ Pace of growth & overall growth potential
∙ Presence of established players in strategic sectors
∙ Quality of projects
∙ Governmental support (State and National)
With its maritime location dotted with excellent
ports, Gujarat is an ideal
place to do global maritime
trade, particularly with the
Middle East, Europe and
Africa. Gujarat is the
gateway to India’s vast
hinterland also. Our robust
physical, social and
industrial infrastructure and
skilled manpower is an
edge which Gujarat offers
over many other global
locations. Today, Gujarat is
the industrial and corporate
face of the country. It is
evincing investors’
interests from all corners of
the world. We have also
ensured that the investment proposals are processed
fast and fructify faster. Gujarat is reckoned as the
‘Growth Engine of India’. The biggest enabler of this
strength is the futuristic infrastructure which the State
has created. In recent years, there is further focus on
building world class infrastructure. They include the
Special Investment Regions (SIRs), Industrial parks and
Logistics parks. They are going to be the building blocks
of Gujarat as a ‘Global Business Hub’. Moreover,
because of the Delhi-Mumbai Industrial Corridor (DMIC)
project, there are new and historic opportunities to
partner in infrastructure and to set up industries,
institutions and amenities. Our SIRs are going to be the
global hubs of economic activity supported by efficient
world class infrastructure. Also, they will have a policy
framework based on the best practices in the world.
Gujarat invites the global investor community,
particularly from Japan, to examine the potentials in
Gujarat.
In last few years there were three Vibrant Gujarat
summits that have attracted maximum investment from
all over the world.
When Mr Ratan Tata decided to relocate the Nano-
car project from Singur, West Bengal, in 2008, he got a
message from the Gujarat Chief Minister Narendra
Modi, inviting the cheapest car's maker Tata Motors to
the western State. That message clinched the issue and
set the ball rolling to realise Mr Modi's desire to make
Gujarat the new automobile hub of India.
One by one, automobile majors have since been
flocking to Gujarat. Ford India, Peugeot, Maruti Suzuki,
Hero - their officials made rounds of the State and the
first two, have announced that they are ready to park
themselves next to Tata Motors in Sanand.
Ford India announced its second Indian facility on
480 acres at Sanand; on September 2, Peugeot, too,
announced its re-entry into India via Sanand, from 584
acres of land.
Ahmedabad: The best Place in Gujarat to Invest
While Gujarat is quickly becoming a favourable
destination for its unique geographic location and vast
availability of transportation and power, many bigger
businesses are moving their
hub into great emerging
market. As Ahmedabad is
the Economic Destination to
Gujarat, it becomes quite
evident that having business
location in and around
Ahmedabad is a proven
business strategy. The latest
report by the global real
estate consultancy,
Cushman & Wakefield has
found that among the top
ten emerging tier II and III
cities in India, Ahmedabad
has attracted nearly 39 per
cent of total investment
since 2010 followed by
Vishakhapatnam and Vadodara, which capped 32 per
cent and 13.5 per cent of investment, respectively.
The report, “Top 10 Emerging Business
Destinations in India,” released by C&W has identified
the cities of Ahmedabad, Bhubaneswar, Chandigarh,
Coimbatore, Jaipur, Kochi, Indore, Nagpur, Vadodara and
Vishakhapatnam as the next most promising business
destinations offering a long term investment potential.
Sardar Vallabhbhai Patel International (AMD) airport is
considered to be one of the best 5 international airports
of India. ❖
Suresh D. Patel, Chairman & M.D. of Surya Group, is a renowned real
estate developer of Gujarat since 1988. He is the past president of theGujarat Institute of Housing & Estate Developers (GIHED), Vice
president the Confederation of Real Estate Developers’ Associationsof India, board member of Gujarat Chamber of Commerce & Industryand advisory committee member at Vibrant Gujarat. He has initiated
many labour welfare activities and CSR activities in Gujarat andcoordinator for various programmes since 2000. He has organisedmany mega property shows and seminar for development of realestate industry on behalf of developers’ association.
Gujarat Samachar & Asian Voice www.abplgroup.com14
Connecting with the landscape of
your ancestors can be a great
privilege in your life. Do you know the
landscape of your parents, or
grandparents? If your family is still well
rooted in the soil of your homeland,
then you will know that landscape
intimately. But if you come from a
family where the roots have been cut, you may not have
a real sense of where you come from. And it’s true that
seeing your origin, homeland and walking through it,
somehow heals something within you. Now you know
where you come from, and have reconnected to your
roots.
So, not only for the future generation but also for
yourself, it is better to have a second home in India. It
also minimizes the generation gap. When the new
generation is living in foreign land and the older
generation in India, the urban style and comfortable
home will make the new generation visit homeland
quite frequently. In fact, the new generation based
abroad has been attracted towards Gujarat not only for
its cultural and festive mood but also for its changing
lifestyle that is very much up to international standards.
Moreover buying property is the best investment at this
point of time. And if one gets involved in buying-selling
of real estate, they can also earn lot of margin. NRIs can
even utilize it during their vacation and later sell it and
earn profit on it. As the real estate prices are multiplying
day by day, it can be a an ideal investment option.
The construction industry is in top gear in this vibrant
state and Gujarat accounts for only 5.96 per cent of
India’s total area but 22 per cent of the country’s total
investment. It has emerged as one of the leading
industrialized states in India, contributing nearly 16.1 per
cent to the country’s industrial output. Gujarat is a state
where infrastructure development has kept pace with
economic development. In fact, infrastructure is driving
growth in many sectors. For example, ports are driving
port-linked industries, while SEZs and roads are driving
industrial investment and institutional development in
far-flung areas. Gujarat was the first state in the country
to enact a law outlining the system of public-private
partnership (PPP) in infrastructure projects and is a
frontrunner in the development of infrastructure.
Evidently large-scale infrastructure projects, IT parks,
Second home in India connectsyou to your origin
Real estate expert Jaxay Shah interacts with Purvi Apurva Shah regarding Gujarat scenario in property industry.
Gujarat Samachar & Asian Voice www.abplgroup.com16
SEZs and urbanisation have been the major driving force
behind the construction boom in Gujarat. The real-estate
graph is on the rise owing to the industrial revolution,
development supportive policy initiatives and
encouraging living standards. There are several factors
that entice developers to Gujarat, such as its highest
GDP growth rate, stable policy regime, high quality
infrastructure and rapid urbanization. Today, with
infrastructural development at its peak and real estate
witnessing steady growth, we envisage a phenomenal
rise in the demand for both residential and commercial
complexes all over the region. The IT sector boom and
industrial development have increased job opportunities
leading to the influx of people looking for business
growth, employment and a prosperous life. NRIs
coming back to their motherland, particularly NRI
techies, have also boosted the demand for high-end
flats and world class facility-equipped commercial
complexes.
Many of the developments are in and around
Ahmedabad with some spilling over to Vadodara, Surat,
Bhavnagar and Rajkot.
Real estate in Ahmedabad
is one of the best
investment options. With
time, the demand for real
estate is going to increase
and with the fast
development of
infrastructure, it is obvious
that real estate becomes
a best place to invest.
Real estate and gold are
the two sure investment
options available to the
people. Real estate India
makes you connected to
your homeland. It gives
the feel of local connectivity with your community and
culture, and the appreciation you get in terms of
investment can be beneficial to make you reach globally.
Real estate gives you pride and status. It reflects a
lot on your personality. What will give you more
satisfaction than having a home in your own motherland,
where you can live in your comfort zone and feel so
much connected to your root? Real estate prices are
multiplying and such investment can be the best gift you
can pass on to the coming generations.
A large number of people of Indian origin born in the
West are moving "back" to the country their parents left
decades ago. With India's economy growing faster than
America or Britain's, new wave of "reverse migrants"
younger generation is seeking opportunities as well as
cultural connection and prefers to settle in India.
While investing in real estate, always be very
cautious. There are certain points to be checked and re-
checked before making any real estate investment.
Before buying any property or land, the legal papers
should be checked. Secondly, check the track record of
the seller. When you are planning to buy any property,
first and foremost thing is to check the title deed of that
Jaxay Shah, Managing Director of Savvy Group of Companies, Vice-
president of Credai India, Committee Member of GIHED, Boardmember of GICEA, Founder trustee of LAA Group, Member of APEXand Board Member of Rajpath Club.
property. The best practice is to get the property deed
checked by an expert lawyer just to make sure that
there are no loop holes. Encumbrance certificate is
necessary to check the title clearance of property when
buying any property. Terence plan is detailed plan of the
property which is done by a licensed surveyor. All the
measurements details in it are accurate in terms of
length, width, borders etc. this plan is necessary for
some specific areas only.
Many property owners take bank loan by pledging
their property. So check they have paid the entire due
before you buy the property. Property taxes are first
charge on property that is paid to government or
municipality. So you have to make enquiry in
government and municipal offices to ensure whether all
tax has been paid as on date. You can ask for latest tax
receipt from owner. It is prudential to measure the land
before registering any property. In some cases, it’s
possible that there will be more than one owner of
property. In that case get No Objection Certificate or
Release certificate from other owners. An NRI can also
sell his property in India.
For this he gives Power of
Attorney to third person
whom he give rights for
selling the property on
behalf of him. The most
important thing is to
ensure the Power of
Attorney is witnessed and
is duly signed by an officer
of the Indian Embassy.
The Power of Attorney
signed by a notary public
has no legal support in
such a case. Deed/Sale
Agreement: this
agreement can be done
by an expert lawyer and signed by both the parties with
two witnesses.
After collecting and checking all the documents, you
have to register land/ property at the Sub-Registrar or
the SDM (Sub District Magistrates) of your area.
Gujarat’s contribution
Some of the areas in which Gujarat has a major
contribution compared to other states of India is: 17% of
fixed capital investment, 16% of industrial output, 22%
of India's exports, 16% of value of output, 12% of net
manufacturing value, 10% of factory output, 98% of
soda ash production, 80% of diamond export, 78% of
salt production, 62% of petrochemical production, 53%
of crude oil (Onshore), 51% of chemical products, 37%
of groundnut production, 35% of cargo handling, 31% of
cotton production, 30% of natural gas (Onshore), 10%
of mineral production, 25% of textile production, 35% of
pharmaceutical products etc. ❖
Gujarat Samachar & Asian Voice www.abplgroup.com18
The purchase and sale of immovable
properties in India by a Non
Resident Indians (NRIs) or by a
Persons of Indian Origin (PIOs) is really
a very simple and easy affair with not
much hassles and problems. For a
detailed and authentic answer one should always refer
to the Foreign Exchange Management (Acquisition and
Transfer of Immovable Properties in India) Regulations,
2000 as amended from time to time. That the entire
copy of the Regulations can be obtained from link
http://rbidocs.rbi.org.in/rdocs/notification/PDFs/13271.pdf
The above regulations have been notified by the
Reserve Bank of India vide Notification No. FEMA/21/200-
RB dated 3rd May, 2000. Likewise, to get a latest update
on the subject, the readers may also very carefully go
through the latest Master Circular on Acquisition and
Transfer of Immoveable Property in India by Non Resident
Indians/Persons of Indian Origin which has been issued by
the Reserve Bank of India vide Master Circular No.4/2012-
13 dated 2/7/2012. That the said Master Circular can be
obtained from http://www.rbi.org.in/scripts/
NotificationUser.aspx?Id=7311&Mode=0
Before going further to analyse the different provisions
of the law relating to acquisition and transfer of immovable
properties in India by Non Resident Indians as well as by
Persons of Indian Origin it would be worthwhile to know
and understand the legal definition of these two entities as
per the Foreign Exchange Management Act.
As per Notification FEMA-5 /2000 dated 3.5.2000 as
amended from time to time, a Non Resident Indian (NRI)
is a person resident outside India who is citizen of India or
is a person of Indian Origin. Likewise, the definition of
Person of Indian Origin (PIO) means an individual (not
being a citizen of Pakistan or Bangladesh or Sri Lanka or
Afghanistan or China or Iran or Nepal or Bhutan) who (i) at
any time, held Indian passport, or (ii) who or either of
whose father or whose grandfather was a citizen of India
by virtue of Constitution of India or the Citizen Act, 1995.
With regard to acquisition and transfer of property in
India by an Indian Citizen resident outside India it is
specifically provided that a person resident outside India
who is a citizen of India may -
a) acquire any immovable property in India other than
agricultural/plantation /farm house, and b) transfer any
immovable property in India to a person resident in India.
c) transfer any immovable property other than agricultural
or plantation property or farm house to a person resident
outside India who is a citizen of India or to a person of
Indian origin resident outside India.
As regards the acquisition as well as transfer of
property in India by a Person of Indian Origin (PIO) the
Regulation 4 of the above mentioned regulation
specifically states that a person of Indian origin resident
outside India may -
(a) acquire any immovable property other than
agricultural land/farm house/plantation property in India by
purchase, from out of (i) funds received in India by way of
inward remittance from any place outside India or (ii) funds
held in any non-resident account maintained in accordance
with the provisions of the Act and the regulations made by
the Reserve Bank under the Act; (b) acquire any
• Ankit Shah
Gujarat Samachar & Asian Voicewww.abplgroup.com 19
immovable property in India other than agricultural
land/farm house/plantation property by way of gift from a
person resident in India or from a person resident outside
India who is a citizen of India or from a person of Indian
origin resident outside India; (c) acquire any immovable
property in India by way of inheritance from a person
resident outside India who had acquired such property in
accordance with the provisions of the foreign exchange
law in force at the time of acquisition by him or the
provisions of these Regulations or from a person resident
in India; (d) transfer any immovable property in India other
than agricultural land/farm house/plantation property, by
way of sale to a person resident in India; (e) transfer
agricultural land/farm house/plantation property in India, by
way of gift or sale to a person resident in India who is a
citizen of India; (f) transfer residential or commercial
property in India by way of gift to a person resident in India
or to a person resident outside India who is a citizen of
India or to a person of Indian Origin resident outside India.
The rules relating to repatriation of the sale proceeds
of property held in India is also very simple. Regulation
No.6 of the above regulations contains very detailed
guidelines with reference to repatriation. It is provided in
this regulation that in the event of sale of immovable
property other than agricultural
land/farm house /plantation
property in India by a person
resident outside India who is a
citizen of India or a person of Indian
origin, the authorised dealer may
allow repatriation of the sale
proceeds outside India, provided
the following conditions are
satisfied, namely:
(i) the immovable property was
acquired by the seller in
accordance with the provisions of the foreign exchange
law in force at the time of acquisition by him or the
provisions of these Regulations; (ii) the sale takes place
after three years from the date of acquisition of such
immovable property or from the date of payment of final
installment of consideration for its acquisition, whichever
is later; and (iii) the amount to be repatriated does not
exceed (a) the amount paid for acquisition of the
immovable property in foreign exchange received through
normal banking channels or out of funds held in Foreign
Currency Non-Resident Account or (b) the foreign currency
equivalent, as on the date of payment, of the amount paid
where such payment was made from the funds held in
Non-Resident External account for acquisition of the
property; (iv) in the case of residential property, the
repatriation of sale proceeds is restricted to not more than
two such properties. (v) In the case of the sale of an
immovable property, other than an agricultural land/farm
house/plantation property in India by an NRI or PIO,
repatriation of the sale proceeds outside India (including
credit to RFC, NRE or FCNR Accounts), is allowed. (vi) Sale
proceeds of any immovable property inherited by NRI/PIO
from a person/resident in India may be remitted abroad but
the amount not to exceed USD one million, per calendar
year subject to production of documentary evidence in
support of inheritance and Tax clearance certificate/no
objection certificate from Income Tax authority to
authorized dealer for remittances. (vii) The RBI has also
now permitted authorized dealers to allow the facility of
repatriation of funds by NRI/PIO in their Non-resident
Ordinary Rupee (NRO) Account up to US $ 1,00,000 per
year representing the sale proceeds of the immovable
property held by them for a period of not less than 10
years subject to payment of the applicable taxes.
It may also be noted that citizens of Pakistan,
Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and
Bhutan have been prohibited from acquiring and
transferring immovable property in India without the prior
permission of the Reserve Bank of India.
The Master Circular of the Reserve Bank of India dated
2nd July 2012 clearly states that an NRI can acquire by
way of purchase any immovable property (Other than
agricultural land/plantation property/farm house) in India.
Likewise, an NRI may transfer any immovable
property in India to a person who is resident in India. He
may transfer all immovable properties except agricultural
land, plantation property or a farm house to any Indian
citizen resident outside India as also to a PIO resident
outside India.
For purchase of the above
property NRI can make payment by
way of funds received in India
through normal banking channels
by way of inward remittance from
any place outside India or by debit
to his NRE/FCNR (B) and NRO
account. Similarly, such payments
for purchase of properties in India
cannot be made by traveller's
cheque or by foreign currency
notes. The NRIs would be happy to
note that for purchase by them of commercial property
under this above general permission they are not required
to file any documents with the Reserve Bank of India.
Lastly one of the important factors which are required
to be taken into consideration is Rules/Law relating to
taxes while purchasing property. At the time of purchasing
of property any individual has to pay registration fees and
stamp duty that varies from state to state. For example if
one buys property in Gujarat the one has to pay 4.9%
stamp duty and 1% registration fees on total sale
consideration and same will vary in another state. As far as
taxes are concerned one does not have to pay any income
tax at the time of purchasing property, though certain
taxes are to be paid when selling property. If NRI/PIO has
held property for less than 3 years then he would have to
pay 30% tax. If property has been held for more than 3
years then tax payable is 20%. Tax is payable on rental
income too. It is also very important to note that at the
time of renting out property or repatriation PAN card is
required. PAN is short form of Permanent Account
Number issued by Income Tax Department. ❖
Ankit Shah, Advocate, LLM (London) is a practicing lawyer at High
Court of Gujarat and Supreme Court. He is specialized in Civil Laws,Land & Property Laws, Corporate Law and Tax Laws. He can bereached at [email protected]
Gujarat Samachar & Asian Voice www.abplgroup.com20
Q: In what manner the purchase consideration for the
residential immovable property should be paid by foreign
citizens of Indian origin under the general permission?
A: The purchase consideration should be met either out of
inward remittances in foreign exchange through normal
banking channels or out of funds from NTE/FCNR
accounts maintained with banks in India.
Q: What are the options available for obtaining guarantors
while applying for a HDFC/LIC loan ?
A: One will need a guarantor for a loan mainly for collateral
security. The guarantor will have to demonstrate
appropriate net worth to cover for the loan. Usually one
can have a guarantor in any city where the loan issuer has
a branch. Talk to loan issuers they will work something out
for NRIs and foreign banks.
Q: Are any conditions required to be fulfilled if repatriation
of sale proceeds is desired?
A: Applications for repatriation of sale proceeds are
considered provided the sale takes place after three years
from the date of final purchase deed or from the date of
payment of final installment of consideration amount,
whichever is later.
Q: Can authorized dealer grant loans to NRIs for acquisition
of a flat/house for residential purposes?
A: Authorized dealers have been granted permission to
grant loans up to nonresident Indian nationals for
acquisition of house/flat for self-occupation on their return
to India subject to certain conditions. Repayment of the
loan should be made within a period not exceeding 15
years out of inward remittance through banking channels
or out of funds held in the investments' NRE/FCNR
accounts.
Q: Can foreign citizens of Indian origin acquire commercial
properties in India?
A: Yes. Under the general permission granted by
Reserve Bank properties other than agricultural
land/farm house/plantation property can be acquired by
foreign citizens of Indian origin provided the purchase
consideration is met either out of inward remittances in
foreign exchange through normal banking channels or
out of funds from the purchasers' NRE/FCNR accounts
maintained with banks in India and a declaration is
submitted to the Central Office of Reserve Bank in form
IPI 7 within a period of 90 days from the date of
purchase of the property/final payment of purchase
consideration.
Q: Can foreign citizens of Indian origin acquire or dispose
of residential property by way of gift?
A: Yes. Reserve Bank has granted general permission to
foreign citizens of Indian origin to acquire or dispose of
properties up to two houses by way of gift from or to a
relative who may be an Indian citizen or a person of Indian
origin whether resident in India or not,provided gift tax has
been paid.
Q: Can Indian companies grant loans to their NRI staff?
A: Reserve Bank permits Indian firms/companies to grant
housing loans to their employees deputed abroad and
holding Indian passport subject to certain conditions.
Source: Reserve Bank of India
Q: Can NRIs obtain loans for acquisition of a house/flat for
residential purpose from financial institutions providing
housing finance?
A: Reserve Bank has granted general permission to certain
financial institutions providing housing finance e.g.
HDFC,LIC Housing Finance Ltd.,etc. to grant housing
loans to non-resident Indian nationals for acquisition of
houses/flats for self-occupation subject to certain
conditions. (Source: www.gihed.org)
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NRIs should keep in mind...
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www.silvernesst.comE:[email protected]
Site: silver Nesst, B/H, Bright Day SchoolVasna - Bhayli Road, TP-3, Vadodara
Ph : +91 99099 83240
AmenitiesMarvelously Aesthetical Entrance, Gate Beautifully Landscaped Green,Spaces club House,Table Tennis,Gymnasium Children’s Play ,Equipment,Walking Track
Developer
for your family 3 Bhk Luxurious Apartment
British-Gujaratis and Indians are getting enthusiastic
to make an investment in real estate in area near
Gandhinagar, capital of Gujarat. The reason is either to
get high returns on the investment in future or to simply
enjoy the retirement period in coming years. Nowadays
more and more people are opting to make real estate
investment in area of Mahudi-Pethapur highway, as the
roads are fast developing road with fantastic
infrastructure and moreover there are many attractive
projects developing here. Many investors have already
booked beautiful Villas and apartments in this area.
It is a known fact that Gujarat is most developing and
a progressing state of India. And real estate market in
Ahmedabad and Gandhinagar is rapidly growing with ever-
rising prices. It can be said that the area near Ahmedabad
airport and Mahudi jain temple is one of the rapidly
developing area.
Projects shaping up in this area are extremely well done,
the facilities and amenities are also very well provided, there
are amenities like huge swimming pool, Gymnasium, Spa,
Art Gallery, Landscaped lawn, Garden, Fountain garden,
senior citizen sitting arrangements, Children play area,
Gazebo, Table-tennis, chess, volleyball ground, Badminton
court and many other facilities. Moreover there is also
skating rink, Golf, American basketball court etc.
According to the reliable sources involved in real
estate in this area, arrangements have been made for of
Loan facility for NRI intending to invest there. Even there
is arrangement for legal aid and advice cell. And the best
part is that anyone from Britain will be able to buy property
on loan right sitting in Britian itself as the projects are
connected with many banks that will facilliate you to buy
properties on loan while you are far away from India.Landmarks
∙ Mahudi Jain temple 9 km from Gandhinagar, 45 km from
Ahmedabad airport.
∙ Gandhinagar, Delhi-Mumbai Industrial Corridor (DMIC),
proposed 6 lane highway, Gift City, Info City (TCS and
other major IT companies). Metro Express for
Gandhinagar-Ahmedabad (MEGA) & BRTS
∙ Proposed Amusement park development
∙ Education corridor: IIT, DAIICT, NID, NIFT, IHM, GNLU,
PDPU, SWBU
∙ Proposed Baba Ramdev’s Yoga-ashram.
∙ Best place to de-stress and rejuvenate oneself - be it on
weekends or just any time. From this point one can keep
away from the maddening city as the undulating
landscape beckons with an abundance of flora and
fauna. Peacock and Nilgai (blue bull) can be seen
roaming along the stretch.
Mahudi-Pethapur highwaydeveloping as a real estate hub