Many NRIs prefer to invest their hard-earned money in a property in India. However, the legal aspects of buying property in India are slightly different for NRIs when compared to ordinary Indians. One of the main questions that plague NRIs is do NRIs need pan card? Further, many are unsure whether they can register NRI property in India without a PAN card. In addition, many people are unsure about the legal complications of buying property without a PAN card. Finally, before you decide to invest your earning in a property in India, you should also be clear about the tax implications for NRI buying property in India. This is applicable not just to India, but also the country of your residence. In order to ensure that you are armed with all the right information, we have carefully curated the information regarding the role of the PAN card when NRIs buy property, whether is it necessary for an NRI to have PAN card to buy property in India and the tax implications for the same.
What is The Difference Between NRI, PIO and OCI Holders?
An NRI is an Indian passport holder, who does not reside in India. This status may change from year to year, based on your country of residence. PIOs (Persons of Indian Origin) and OCI (Overseas Citizen of India) do not hold Indian passports. They are foreign citizens but are Indian by birth or descent. Thus, while investing in India, there are different rules apply. You should also note that as of 2015, the PIO and OCI schemes have been merged.
Is it Compulsory For NRIs To Get A PAN Card?
There is no rule that states that it is compulsory for an NRI/PIO/OCI to get a PAN card. This is definitely not needed if you do not plan to invest large amounts of money in India. However, as per the latest government regulations, services like opening a new bank account in India, getting a new credit card, investing in the stock market in India or making a purchase of more than INR 50,000, the PAN card is mandatory. However, if you have no taxable income from India or your income is below the tax threshold, then you can make use of Form 80 in lieu of a PAN card. This will allow you to open bank accounts without getting a PAN card. Note that this option is only open to NRI/PIOs/OCI holders.
Do NRIs Need PAN Card to Buy Property in India?
There are certain situations where it would be beneficial for NRIs to have a PAN card. If you are planning to do any of the below, it is highly recommended that you get a PAN card, as this will make the whole process a lot easier for you.
- If you want to purchase property in India and repatriate the funds to your country of residence. While PAN is not compulsory to enter into property transactions, PAN is mandatory if you want to repatriate the funds from your NRO/NRE account.
- If you have a taxable income in India, PAN is mandatory to pay your taxes.
- If you want to invest in Mutual Funds in India.
What Are The Restrictions on Property Purchase For NRIs?
There are some restrictions mandated by the government regarding property purchase for NRIs. These include:
- NRIs cannot purchase agricultural, farmland or plantation property in India.
- NRIs no longer need to take permission from RBI for purchasing non-agricultural land or immovable property in India.
What Are The Tax Implications For NRIs Buying Property in India?
As per the current laws, NRIs will need to pay taxes on their property in India unless there is rental income accruing from it. However, if you are selling a property, a capital gains tax might accrue as well.
Now that you have an answer to the question of whether you can register NRI property in India without a PAN card, you are well on your way to making sound investments in India. We hope we have been able to answer questions like do NRIs need a PAN card? Now you know that it is not really possible to register NRI property in India without a PAN card. In addition, you should also have a clear idea about the tax implications for NRI buying property in India. We hope that this article has made your road to buying property in India just a little bit easier. Please feel free to drop us a comment in case you have any further queries. We would love to hear from you.