Under Exchange control law, any person resident outside India who is citizen of India or a person of India origin shall be considered as NRI for the purpose of purchase of property in India. The exchange also specifies the mode of payments for the purpose of acquisition of property in India as follows:
In fact, NRIs are also eligible to apply for a home loan in India for the purchase of any residential property within India. Banks as well as Non-banking financial institutions offer such types of loans to NRIs. Such loans can be repaid through inward remittances from outside India via Banking channels or from the balances held in NRO accounts.
Even the interest on loan for the construction, repair or purchase of a residential property in India can be claimed as tax deduction under Income Tax law. A deduction of up to Rs. 2,00,000 is allowed in case of self-occupied houses and the interest payable on housing loan is entirely deductable from the rental income.
A deduction up to Rs. 1.5 lakh is also available for the repayment of principal amount of loan from gross total income of an NRI.
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