High property prices in India deter investors but many overseas locations offer good investment opportunities. Buying property abroad has become easier after the RBI raised the annual limit for remittance from Rs 75 lakh to Rs 1.5 crore. "There has been a significant increase in the number of foreign real estate investment-related enquires since the Central bank increased the investment limits," says Mudassir Zaidi, National Director, Residential Agency, Knight Frank India.
However, before you buy, do the due diligence. Find a consultant who has knowledge of the relevant laws of India and the country where you are looking to purchase the property. For instance, if you plan to bequeath the property, you need to check the inheritance and succession laws of the country where you intend to invest.
You also need to be aware of the tax implications of buying a foreign property. They will depend on your citizenship status and the country of purchase. For instance, for Indian residents who have purchased a property in the US, any rental income arising from the property (whether notional or actual) will be taxable in India. This income shall also be taxable in the US. However, "If you are taxed in the foreign country, you can claim a foreign tax credit in India for taxes paid in the foreign country," says Amarpal S. Chadha, Tax Partner, EY India.
with thanks : Economic Times : LINK : for detailed news.
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