Can NRI buy property jointly with resident Indian?

Yes, non-residential Indian (NRI) can purchase residential and commercial property jointly with resident Indian, there is no restriction on number of properties that can be purchased and doesn’t require any special permission.

NRI share of payment can’t be made in foreign currency, can make the payment using Indian currency through normal banking channel like NRI, NRO or NRE account.

In case the NRI is unable to come to India for completing the property purchase, NRI can give power of attorney to resident Indian for property purchase on behalf

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Five simplified steps for NRI to purchase immovable property jointly with resident Indian in India

1. Power of Attorney
2. Sale Agreement
3. Home Loan
4. TDS
5. Sale Deed

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Let’s see the above steps in detail

1. Power of Attorney (POA):

As we know that NRI lives outside India, If NRI is not physically present in India for property registration. NRI have an option to give POA to complete the property purchase. The POA can be general or specific to present the document in sub-registrar office.

NRI should follow below steps to give POA to resident Indian

• Prepare the POA draft in word document
• Print the POA draft on A4 size paper
• NRI and two witnesses sign the POA
• Get the POA attested by Indian embassy in your country
• Send the POA to your resident Indian in India via reputed shipping partner like DHL or Fedex
• Your POA holder should adjudicate the POA in District Registrar’s office, in the jurisdiction of property location

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2. Sale Agreement:

Sale agreement is a promissory document that states that schedule property will be transferred to buyer at the future date

Below is the steps to make sale agreement:

• Draft the sale agreement in word document
• Ask the resident Indian to buy a non-judicial e-stamp paper, the stamp duty value is 0.1% of buying price
• Resident Indian should prints the sale agreement draft on non-judicial e-stamp paper, followed by A4 size bond paper
• Seller, buyer and two witnesses signs the sale agreement (If NRI give POA, POA holder signs the sale agreement on behalf)

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3. Home Loan:

All the bank and finance companies provide joint loan account for NRI and resident Indian for buying immovable property in India

The bank need following documents to process the loan

• Income proof of buyers
• Property marketability (seller’s sale deed and encumbrance certificate)
• Sale Agreement

The bank issue loan in India currency, the loan has to repaid in same current using your normal NRI, NRO, NRE or residential Indian bank account.

The bank doesn’t credit the loan amount directly to NRI, bank credit the loan amount directly to seller or developer bank account.

NRI can co-ordinate with bank remotely via email, telephone or WhatsApp, your physical presence is not require to get the loan sanction. However physical presence is require to register MODT in sub-registrar office or POA holder can present on behalf

If the loan is taken in joint name, usually NRI is the primary applicant and resident Indian is the secondary applicant in joint loan account, all the joint borrowers should present for MODT registration in sub-registrar office or POA holder can present on behalf

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4. TDS:

Tax Deducted at source (TDS)

The buyer is required to deduct TDS from consideration if the property value is more than Rs. 50 lakh. Buyer deposits the TDS in income tax department

If the seller is Indian citizen, the TDS deduction is 1% of consideration or guidance value, whichever is higher,

If the seller(s) is NRI, the TDS ranges from 20.80% to 23.92% based on the consideration, capital gain and duration between purchase & sale of property. However NRI seller can apply for low tax certificate in income tax department to bring down TDS rate.

You can log into Income tax department website and pay the TDS

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5. Sale Deed:

Sale deed is the written document that transfers ownership of the property

Below is the steps to make sale deed registration

• Draft the sale deed in word document
• Make sure to specify the share in property (ratio of NRI and resident Indian share in property)
• Print the sale deed draft on document paper
• Pay the stamp duty and Registration fee
• Book the registration appointment
• Seller, buyer, POA holder and two witnesses visits the sub-registrar office for sale deed registration.

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