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What are the advantages of investing through Goodwill Quest India Pvt Ltd?

Goodwill Quest India Pvt Ltd (GQI) is a Channel Partner & Sales Associates to most leading builders and developers of India and GQI's service is at no EXTRA COST to its customers. Infact, for all new launches GQI does not charge any commission and instead offers direct developer's price. Further, GQI will facilitate free advise and guidance on Income Tax matters, RBI related matters, facilitation of loans from banks at competitive rates, assist in selection of units in any given project on preferential allotment basis as also draw comparisons between properties of different developers to shortlist the most suitable property with customer's point of view. A number of value added services, as elaborated in the Services section accrue to our customers.

Who is eligible to invest in Immovable Property in India?

Resident Indian Citizen, Non Resident Indian (NRI) being Indian citizen are allowed to invest in immovable property in India without RBI permission. Foreign Nationals of Indian Origin , whether resident in India or not , vide RBI notification May 26, 1993 can acquire or dispose off any immovable property other than agricultural land/farmhouse/plantation property subject to certain conditions.

Who qualifies to be a NRI ?

Non Resident Indian, who is an Indian citizen and Non Resident Indian, who is a foreign citizen BUT of Indian origin, other than citizens of Pakistan, Sri Lanka, Bangladesh, Afghanistan, China, Iran, Nepal, or Bhutan.

What is the mode of payment for NRI to purchase property in India?

A person of Indian Origin resident outside India may acquire any immovable property other than agricultural land/farmhouse/plantation property in India by purchase, from out of (a) funds received in India by way of inward remittance from any place outside India, OR (b) funds held in any non resident account maintained in accordance with the provisions of the Act and the regulations made by the RBI.

Which are the Indian laws applicable to NRIs?

Income Tax Act, Wealth Tax Act, Gift Tax Act, Transfer of Property Tax and FEMA. Implication of the Act will be relevant to the respective merit of the case.

What are the types of properties that can be purchased by NRIs and Persons of Indian Origin (PIO)?

NRIs & PIOs can acquire immovable property in India (Acquisition and Transfer of Immovable Property in India) other than agricultural property, plantation or a farm house; provided that in case of acquisition of immovable property , payment of purchase price, if any, shall be made out of (i) funds received in India through normal banking channels by way of inward remittance from any place outside India or (ii) funds held in any non resident account maintained in accordance with the provision of the Act and the regulations made by RBI.

Are Loans admissible to NRIs for acquisition of a flat/house?

Authorised dealers can grant loans/overdrafts to NRIs holding Indian passport against security of immovable property proposed to be acquired by them. Certain Financial Institutions also provides housing finance eg HDFC, LIC Housing Finance Ltd. Repayment of 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 investor's NRE.FCNR/NRO account.

Can a NRI or PIO repatriate funds from sale of property in India?

Repatriation of sale proceeds is permitted with prior approval of RBI, provideda. Such property is purchased on or after May 26, 1993.
b. Such sales take place after three years from the date of acquisition or from the date of payment of final installment of consideration, which ever is later.
c. Repatriation is limited to the extent of foreign exchange paid for the acquisition of immovable property (incase of sale of residential properties, the amount equivalent in foreign exchange paid for acquisition of minimum two properties).* Applications for necessary permission for repatriation of sale proceeds should be made in the Form IPI 8 to the Central Office of Reserve Bank of India at Mumbai within 90 days of the sale of property.

What are the Income Tax Implications on NRIs?

For Income Tax purpose, a NRI has been defined as an individual being a citizen of India or a person of Indian origin who is not a resident. A person is considered to be of Indian Origin if he or either of his parents or his grandparents was born in an Indian undivided family.Rental Income is taxable in India. Profit on sale of property will attract Income Tax. The provisions are complex and it is necessary to have factual details of transaction. But broadly the tax component is in the range of 20- 30% (+ Surcharge) of the profit on sale of property. However, it is possible to reduce tax liability by applying for certain beneficial instruments as per provisions of the Income Tax Laws.

What is the procedure to follow incase of purchase resale property from the market?

All title deeds related to the property should be examined thoroughly. In all high value transactions, it is advisable to route your purchase through a law firm. Whereas the registeration of properties in new buyer's name vary from state to state, it is prudent to undertake certain common precautions by establishing clear title of the property in sellor's name by checking ownership titles from the very onset, details of loans and incumberances etc. Additionaly, sellor should furnish NOC from Society, Muncipal Corporation, Income Tax authority, Urban Land Ceiling Authority, as applicable.
Stamp duty , transfer charges, speed money etc payable at the time of transfer of property should be established beforehand. Thereafter and alongside payment of dues for the entire sale proceed, legal possession of the property is taken over together with formal agreement or document of transfer of the property, duly signed by both the Sellor and Purchaser with their Income Tax Permanent Account Numbers.
Subsequently, please ensure to change the name of the property owner in records of the Housing Society, Electricity Provider, Muncipal Corporation, Water Board etc.

What is Stamp Duty and who should pay this amount?

Stamp duty is State Government Tax on Transfer of Property. This is payable by the Buyer unless agreed otherwise.

What is market Value of the Property and is Stamp Duty payable on the market value ?

Market Value is the price at which the sale/purchase agreement has been finalised between the sellor and buyer. This price can NOT be less than the Guideline Value of the area/property promulgated by the Sub Registrar's office in whose jurisdiction the property is located and varies from location to location. Stamp duty is payable as per the Market Price which can not be lower than Sub Registrar's price.

What is the time frame within which the transfer deed should be executed with the local authorities ?

As per the Act for Registeration of Properties, a unit should be registered within 4 months from the date of its execution.

What is the tax benefit one can avail by taking home loan ?

Housing loan is a significant tax saver because both the interest and principal components offer better tax benefits. Under Section 24 of the Income Tax Act, a maximum of Rs 1.5 lakh can be deducted from taxable income. The principal component of the loan availed can be claimed subject to a maximum ceiling of Rs 1 lakh under 80C. To claim these benefits, the property has to be constructed or acquired within three years from the end of the financial year in which the capital is borrowed. Another important point is that home loan interest is deductible on an accrual basis. The tax benefits are not only available for home loans from banks and financial institutions but also applicable for loans from other sources like friends and relatives for home renovation, construction etc if you have valid proof. However, the benefit allowed here is only for the interest portion.

What are the tax implication of owning more than one property ?

Many people buy more than one property without understanding the tax implications. If you own two properties, one will be deemed to be let out even if actually it is not. Tax is applicable on the notional rental income for the property. For a second home loan, there won't be any tax benefit on the principal repayment of the loan.

Further, the additional house owned is taken for computation of the total wealth for the purpose of computing wealth tax. A wealth tax of 1 per cent is payable on the amount exceeding Rs 30 lakh.

What is the tax payable on Rental Income ?

In case if the second property is let out, municipal taxes and 30 per cent of the total rental income can be deducted from tax. In addition, a full deduction of interest paid against home loan is also allowed against the rent.

For example: If X lets out his property and earns Rs 25,000 per month as rental income, his annual rental income would be Rs 3 lakh.
If the property tax for the year is Rs 10,000, and the maintenance cost Rs 90,000 (30 percent of the rental income) is deducted from the rental income, his taxable income would be Rs 2 lakh only.
If he is having a home loan of which the annual interest portion comes more than Rs 2 lakh, the entire rental income will become tax free.
Apart from this, the Direct Taxes Code, which is expected to be implemented in the next financial year, might exclude the principal component.

What is the tax benefit if one takes home loan for purchase of property under construction ?

For a property under construction that is acquired through a loan, the interest paid on the principal during the construction period can be claimed for tax benefits. The principal portion that gets repaid before completion is excluded for deductions under 80C until the property is acquired.

Is there any tax benefit if one buys land by taking loan ?

If you are planning to buy a land, an important point to keep in mind is that there is no tax benefit associated with land purchase loans, even if it is let out.

Do commercial properties attract Wealth Tax ?

Commercial properties are exempt from wealth tax, and not included in calculating the wealth of a person. But it is imperative to note that a commercial property is not eligible for deduction under Section 80C.

What is the interpretation of Capital Gain ? How can one avoid paying Capital Gains Tax ?

When a property is sold for a profit after three years from the date of purchase, it becomes a long term capital gain, and it is taxed at the rate of 20 per cent with indexation benefit. This capital gains tax can be avoided if the total proceeds of the sale are completely invested in any residential property or in REC/NHAI bonds. Tax exemption is applicable if the total amount is invested in residential property within two years or in the construction of a residential property within three years.

Can home loan taken jointly by husband and wife be exempted from tax ?

If a husband and wife take a joint home loan, both of them can claim tax exemption individually based on their respective shares in the loan. To claim tax benefits, all co-borrowers have to be co-owners.

Is House Rent Allowance (HRA) exempted from tax ?

Many people have a misconception that house rent allowance (HRA) benefits are applicable along with the income tax deductions.

If you are living in an 'own' house which is bought with a home loan, you are eligible only for tax deductions under Sections 24 and 80C. But if you have availed a loan to construct a house and live in a rented house, you are not eligible for any tax rebates but for HRA benefits.

On the other hand, if you have rented out your house and live in a rented house, you are eligible for both income tax benefits and HRA benefits but the rental income will be added to your taxable income.

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