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<ul><li>India’s central bank has increased the key <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword> to 5.4%, which will make EMIs for home and other loans more expensive.</li><li>This is the third such hike carried out by India’s central bank in the last four months.</li><li>The industry also seemed to be bumped with the timing of this increase as home sales in India had just recovered from Covid blues.</li></ul><keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">Home loan</keyword> EMIs are all set to rise once again as the Reserve Bank of India (RBI) increased the key repo rate to 5.4% to tame the inflation rate in the country. The RBI governor Shaktikanta Das announced this increase of 50 basis points (bps) on Friday morning. The rate hike will eat into household budgets as <keyword id="35519" type="General" weightage="20" keywordseo="home-loans" source="Orion">home loans</keyword>, car loans get costlier. This is the third such hike carried out by India’s central bank in the last four months and it will increase the borrowing costs for both corporates as well as individuals. “A rate hike was expected, but the expectation was for a maximum of 35 bps. The hike by 50 bps is definitely on the higher side, and home loan lending rates will now edge further into the red zone,” Anuj Puri, the chairperson of property consultancy firm Anarock group, said. Kalpesh Dave, head of corporate planning and Strategy at Star HFL, advised the existing borrowers to engage with lenders to see if they can maintain their EMIs through increase in balance tenor for floating rate loans. Consumers can also think of switching to fixed rate loans after a careful cost-benefit analysis, he suggested. <cmsannotation type="cmsannotation" annotationid="End of low interest rate regime" comment="subhead" text="End of low interest rate regime">End of low interest rate regime</cmsannotation> Puri noted that the announcement marks the end of the all-time best low interest rate regime, which drove housing sales across the country since the pandemic. The interest rates — along with swollen primary raw materials costs of cement, steel, labour — will increase the property rates. Real estate company CREDAI’s president Harsh Vardhan Patodia noted that these factors would immediately impact home buying, though only for a short-term. The impact may last till the festive season of Diwali as well, multiple experts have pointed out. However, Raman Sastri, the chairperson and MD of Sterling Developers, emphasized that there is still hope from pent up demand from a very large population and first-time home buyers <cmsannotation type="cmsannotation" annotationid="The timing couldn’t have been worse" comment="subhead" text="The timing couldn’t have been worse">The timing couldn’t have been worse</cmsannotation> The Indian real estate market is also unhappy about the timing of this rate hike, as the housing sales were just beginning to show signs of recovery. The sale of residential property in the first half of 2022 was the highest in over a decade. According to data shared by Anarock Research, roughly 1.85 lakh units were sold across top seven cities between January to June 2021. “The inflationary pressures and the resultant change in RBI’s earlier dovish policy stance couldn’t have come at a more inopportune time for the sector. However, we believe that the long-term prospects look healthy given that macro-economic dynamics will moderate to a more favourable one as growth remains intact and global headwinds ease up,” Dr Samantak Das, chief economist and head of research at Real Estate Intelligence Service (REIS) India, said. SEE ALSO <a href="https://www.businessinsider.in/personal-finance/now-nris-can-pay-parents-utility-bills-and-childrens-school-fees-in-india/articleshow/93368504.cms" style="">Now, NRIs can pay parents' utility bills and children's school fees in India</a> <a class="tout-title-link" href="https://www.businessinsider.in/finance/news/shaktis-gati-on-interest-rate-hike-to-continue/articleshow/93366502.cms" style="">Shakti’s Gati on interest rate hikes to continue</a> <a href="https://www.businessinsider.in/business/corporates/news/telecom-and-consulting-sectors-sees-the-highest-rate-of-return-to-office-it-witnesses-the-least/articleshow/93342089.cms" style="">Telcos, consultancies bring employees back to offices even as techies stay home</a>

It’s time to shift to fixed home loan rates, say experts after third rate hike in 4 months

Buying a home ‘back in India’ is every NRI’s dream. Thankfully, it can be fulfilled due to availability of easy home loan facilities, relaxed rules by the RBI and online transacting options. 
 
While the guidelines to apply for NRI home loans are same as those for resident Indians, certain terms differ for the former. NRIs are allowed to buy any property or plot for commercial or residential use however agricultural land, plantation property and farmhouse are not permissible unless specific consent from the RBI is attained. 
 
So if you’ve shortlisted a property and want to approach a bank, it will be a good idea to ensure that you meet the following criteria. 
This begins with the NRI status in the first place. Both Non-Resident Indians and Persons of Indian Origin can apply for home loans. While salaried people need to have spent a minimum of one year in employment abroad, businessmen or self-employed are eligible only after three years of employment. 
 
Furthermore, self-employed might find themselves battling stricter rules and challenges. For example, those with office spaces and white collared jobs get granted loans, but a taxi driver might not. PIO and OCI may not be allowed to buy plots and commercial properties but those classified as NRIs can. Certain jobs may also be treated differently. For instance, Indian Merchant Navy personnel can be classified as NRI if they possess a foreign account and the same rules will apply. 
 
Any person above the age of 21 can apply but a ruling factor for home loan sanctions are the income and educational qualification of the applicant. One is required to possess at least a graduation degree or diploma certificate. With respect to income, banks differ on minimum income limits but an average of USD 30,000 for those living in Western countries and 35,000Dhms for those in the Middle East usually suffices. But do keep in mind that banks don’t fund negative locations like Africa. 
 
The documentation requisites mostly include passport copy, valid visa and work permit copies, proof of foreign residence, employment contracts, salary certificate and updated NRE/NRO account statements. Certain banks may ask for more documents either based on your income or location. However, the good news is one needn’t make a visit to India to apply for home loans. Most reputed banks have their branches on foreign shores, or one can even apply online. However, a friend or family member living in India will have to mandatorily be assigned the Power of Attorney and as co-applicant to carry out further formalities with the bank. 
 
Most banks allow 80-85% of the value of property subject to gross monthly income. The rate of interest for NRI home loans tend to be the same or sometimes marginally higher than resident loans due to the higher risk involved. In case of flat purchases, the banks pay the loan amount directly in favour of the builder as per the due dates mentioned in the agreement. Unlike resident Indians, the tenure for NRI home loans is usually restricted to 15 years and can be extended at the discretion of the bank for select individuals. This is because most banks have a general idea that repayment capability is much higher for those living abroad. 
 
The down payment and repayment of the loan can only be done in Indian Rupees and through normal banking channels or NRE/NRO accounts by way of remittances from abroad. In case the house bought is for investment purpose, the RBI also permits rent received to be paid against the EMI. 
 
However, before going ahead with the loan, do make sure to check for any hidden costs or loopholes involved. Comparing rates of different banks and checking other costs like processing and administrative fee, pre and late payment charges etc. will help make a more informed choice. 
 
Assigning the Power of Attorney in advance can further quicken the process. With numerous housing portals dominating the online space today, the ease of shortlisting a house and applying for loans has become a child’s play. Some of these portals have also partnered with financial institutions to provide better service and a hassle free experience. Not only do they liaison between the bank and the customer, but also ease the documentation work with builders. 
 
So if you intend to apply for a home loan by either doing a quick visit to India or sitting comfortably on foreign shores, here is a quick checklist to keep in mind. 
 
· Cross check your eligibility for applying, compare bank rates and terms of the loan. 
· Study the market, shortlist a property and verify its details. 
· Have all the documents like the passport, valid visa and work permit, contract of employment, work experience certificate, salary certificate and statements of NRE/NRO accounts etc., ready in advance. This reduces approval and processing time. 
· Assign the POA to a trusted family member or friend. 
· Keep a track on repayment and smooth closure for a clean credit history. 
 
The Indian real estate market has much to offer today. For those sitting on foreign shores and looking to invest in India, there couldn’t be a better time. 
 
(The article is contributed by Housing.com) 
 
(Image: Thinkstock)

Here are dos and don’ts for NRIs who apply for home loans

CHENNAI: Home buyers are not postponing their decision to a buy a home any more, if numbers released for the first quarter by home financiers are any indication. 
 Mortgage major HDFC has witnessed 23% growth in its retail <keyword id="6354730" type="UNKNOWN" weightage="20" keywordseo="Home-loan">home loan</keyword> book during the first quarter of the %fiscal over the same period last year. "The company's growth is quite wide-spread. The demand fundamentals in the Indian <keyword id="6354553" type="COMPANY" weightage="20" keywordseo="real-estate">real estate</keyword> are now focused around cities that have sufficient economic activity, be it industrial- or service sector-driven," Renu Sud Karnad, managing director, HDFC said. Buoyed by the response, HDFC is pushing home loan offerings by sending mailers to customers to build their dream home. The communication states loan approval even before a property is selected, flexible loan repayment options, loans from any office for purchase of home anywhere in India and counselling services prior to property acquisition. 
 Similarly, Sundaram BNP Paribas Home <keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">Finance</keyword> has seen 15% growth in its home loan book during the first quarter of 2014-15 to Rs 4,413 crore as against Rs 3,847 crore during the same period last year. 
 
"The growth has primarily come from Karnataka and other non-south branches," Srinivas Acharya, MD, Sundaram BNP Paribas Home Finance, said. 
 Going forward, financiers say the real game changer and growth in the home loan book would be affordable housing segment with the push already coming in the Union Budget. Among other things, the <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">finance minister</keyword> announced an allocation of over Rs 7,000 crore towards the development of 100 smart cities, concessions on housing loans and increase in allocation under rural housing. 
 Against this backdrop, financiers are anticipating 20% growth in the home loans business this year over the last fiscal. "We expect the real push to come from loans under Rs 15 lakh. The main borrowers of sub-Rs 15 lakh are the LIG (low income group) and the EWS (economically weaker section) of the society," Deo Shankar Tripathi, president and CEO, DHFL (Dewan <keyword id="100080" type="ORGANIZATION" weightage="20" keywordseo="housing-finance">Housing Finance</keyword>), said. Around 58% of the loans disbursed by the company during last fiscal was Rs 15 lakh and under. DHFL's home loan book grew 22% during the first quarter to Rs 42,800 crore as against Rs 35,100 crore. The company has opened 105 branches in the last four months. 
 
Financiers also say that the government is pushing a credit guarantee fund scheme (a sovereign guarantee for loans of up to Rs 5 lakh, mainly targeting the low income group). "Though launched by the previous government, the new government is pushing this scheme. Senior officials from urban housing and poverty alleviation department have already had two rounds of meeting with home finance companies. The discussions revolved on creating small units with low cost technology in the peripheral areas of big cities," said a financier who did not wish to be identified. 
 Karnad said, "In the mid and smaller size cities, there is availability of vast land resources at lower cost. Improving demand from residents, increasing <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword> from NRIs, expatriates and individuals working in metros and growth in employment opportunities are the prime reasons. In some of these cities, the price has appreciated more than 10% in the past two to three years. However, they are still affordable for industrial workforce as compared to metros." 
 Also, with the Budget providing an <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">income tax</keyword> benefit by raising deduction against interest payment on home loan from the taxable income by Rs 50,000 to Rs 2 lakh from Rs 1.5 lakh earlier, this is expected to propel demand from the middle class for homes in Tier II and III locations. 
 Additionally, an increase in basic tax slab from Rs 2 lakh to Rs 2.5 lakh will increase the disposable income of an individual in that slab. "All these tax concessions will lead to considerable <keyword id="25450" type="UNKNOWN" weightage="20" keywordseo="savings">savings</keyword> and therefore increase in one's disposable income which will lead to enhanced loan eligibility," Karnad said.

Home Loans Grow Up To 23% In Q1

<ul><li>Despite their physical presence abroad, NRIs maintain tax obligations on their Indian-sourced income. </li><li>The capital gains tax provisions for NRIs are similar to those for resident individuals, except for the applicability of TDS provisions. </li><li>It is important for NRIs to carefully consider their tax liabilities in both India and the country where they are a resident. </li></ul>You are a non resident Indian (NRI) if you live abroad. More specifically, you are classified as "non-resident" of India for a specific financial year as per the Income Tax Act. Despite their physical presence abroad, NRIs maintain tax obligations on their Indian-sourced income. This includes income sources such as salary received for services provided in India, interest earned from fixed deposits or savings bank accounts in India, as well as any capital gains arising from the sale of assets located in India. “NRIs are not taxed on their foreign income, which is not received in India or deemed to accrue or arise in India. However, they may be subject to tax in the country where the income is earned,” says Archit Gupta, CEO, Clear, a fintech company. <cmsannotation type="cmsannotation" annotationid="How income in India is taxed for NRIs" comment="subhead" text="How income in India is taxed for NRIs">How income in India is taxed for NRIs</cmsannotation> Let us take a look at how income in India is taxed for NRIs. <cmsannotation type="cmsannotation" annotationid="Income from salary" comment="subhead" text="Income from salary">Income from salary</cmsannotation> NRIs are subject to income tax in India on their salary if the services are rendered in India. “The income is taxed according to the income tax slabs applicable to residents,” says Akhil Chandna, Partner, Grant Thornton Bharat, a professional services firm. <cmsannotation type="cmsannotation" annotationid="Income from business and profession" comment="subhead" text="Income from business and profession">Income from business and profession</cmsannotation> Income earned by NRIs who have business connections in India is liable to be taxed in the country. The taxation of this income follows the same slab rates that are applicable to residents, and it is calculated based on the total income earned within India. <cmsannotation type="cmsannotation" annotationid="Rental income" comment="subhead" text="Rental income">Rental income</cmsannotation> There are no distinct rules for the taxation of house property in India based on residency status. The taxation rules for rental income from properties situated in India are the same for both residents and non-residents (NRIs). The rental income is taxable in the hands of the property owner, regardless of whether they are an NRI or a resident Indian. <cmsannotation type="cmsannotation" annotationid="Income from other sources" comment="subhead" text="Income from other sources">Income from other sources</cmsannotation> "Other Sources" income typically includes interest income from fixed deposits and savings bank accounts held in India, dividend income, etc. “Interest earned on Non-Residential External (NRE) and Foreign Currency Non-Resident Account (FCNR) accounts is fully exempt from tax. However, interest on non-resident ordinary (NRO) accounts is fully taxable,” says Chandna. He adds that for NRIs, income from "Other Sources" is subject to slab rates applicable to them. However, in many cases, income paid to an NRI is subject to TDS at a flat rate of 30% plus the applicable surcharge and health and education cess. <cmsannotation type="cmsannotation" annotationid="Taxation on investment gains" comment="subhead" text="Taxation on investment gains">Taxation on investment gains</cmsannotation> The capital gains tax provisions for NRIs are similar to those for resident individuals, except for the applicability of TDS provisions. The taxability of capital gains depends on the holding period and the type of investments sold. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Type of Shares </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Holding Period </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Category </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Rate of Tax </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="2" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Listed shares </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Less than 12 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Short Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">More than 12 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Long Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% on gain in excess of INR 1,00,000 </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="4" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Unlisted Shares/ Immovable Property </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Less than 24 months </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Short Term </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Slab Rates </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">More than 24 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Long Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% (with indexation) </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="4" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Debt Funds and Other Capital Assets </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Less than 36 months </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Short Term </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">More than 36 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Long Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% (with indexation) </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr></tbody></table> Source: Grant Thornton <cmsannotation type="cmsannotation" annotationid="Taxation on money remitted to India" comment="subhead" text="Taxation on money remitted to India">Taxation on money remitted to India</cmsannotation> Since the money being remitted is from the NRIs income in a foreign country, it may be subject to income tax in that country. “Hence, in most cases, the NRI will not have to pay income tax on the remittance in India as it is already taxed in the foreign country. Further, if the money is being remitted for personal use by the NRI's family in India, such as for their living expenses or education, there is no tax liability,” says Chandna. <cmsannotation type="cmsannotation" annotationid="How NRIs can reduce their tax liability" comment="subhead" text="How NRIs can reduce their tax liability">How NRIs can reduce their tax liability</cmsannotation> NRIs can avail tax deductions under the Indian Income Tax Act, including deductions under Section 80C for investments in specified financial instruments, Section 80D for health insurance premiums, Section 80G for charitable donations, and Section 24 for home loan interest. “NRIs can minimise capital gain tax by investing in specified assets, such as residential properties and specific bonds, within a stipulated time period,’ says Chandna. <cmsannotation type="cmsannotation" annotationid="What to do if your PAN is inoperative" comment="subhead" text="What to do if your PAN is inoperative">What to do if your PAN is inoperative</cmsannotation> An NRI is not required to obtain an Aadhaar Card in India, and hence they are not required to link their PAN and Aadhaar. However, it is likely that some NRIs will find their PANs inoperative after June 30. “This is because the residential status of the individuals may not be updated in the records of the Income Tax (IT) Department as "Non-Residents". The IT Department has clarified that NRIs whose PAN has become inoperative shall reach out to their jurisdictional AOs along with supporting documents (such as a passport copy) to prove that they are NRs in India,” says Chandna. “It is important for NRIs to carefully consider their tax liabilities in both India and the country where they are resident, as double taxation may arise if they are taxed on the same income in both countries,” says Gupta. NRIs can claim relief from double taxation under the provisions of a tax treaty (DTAA) between India and the country where they are residents or through the use of the foreign tax credit provisions under Indian tax law.

Are you an NRI having income in India? Here’s how you will be taxed

<ul><li>The positive momentum in the <keyword id="6354553" type="General" weightage="20" keywordseo="Real-estate" source="Orion">real estate</keyword> sector can hold on till the first quarter of 2023 say experts. </li><li>From the second quarter onwards, demand will be determined by interest rates, say experts. </li><li>The property rates could further shoot by 8% at least next year, due to rising input costs.</li></ul><keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword>’s <keyword id="35288" type="General" weightage="20" keywordseo="real-estate-market" source="Orion">real estate market</keyword>, which has been buoyant since the Covid-19 pandemic, is expected to continue with its growth momentum in the first quarter of 2023, according to experts. Few experts are willing to make predictions beyond the first three months of the next year, due to uncertainty. They believe that an after-effect of global economic slowdown might have a role to play in the property purchase decisions of Indians. “There is a possibility of a recession in major global markets including the US and India cannot be decoupled from it. There could be some repercussions in the Indian market by way of layoffs which in turn may slow down the residential demand, if at all,” Anuj Puri, Chairman – Anarock Group, told Business Insider India. Moreover, in December, the Reserve Bank of India (RBI) raised base interest rates for the fifth time in seven months – taking it to 6.25%. Consequently, banks are expected to pass on the hiked interest rates to the consumers – increasing the cost of home ownership. Added to that, analysts say that the burden of home loans will be higher as many consumers have <a href="https://www.businessinsider.in/personal-finance/news/be-prepared-to-pay-higher-emis-no-room-for-loan-tenor-increase-after-rbis-latest-rate-hike/articleshow/96052276.cms">exhausted the option of increasing</a> home loan tenures without impacting their EMIs – in the last four interest rate hikes. The direction of repo rate hikes will guide the housing property demand in 2023, and experts say that there could be more such hikes ahead. “A lot will also depend on how the home loan interest rates pan out over the next year. While so far, the impact of the rate hikes has been minimal but if the rates rise further, it may go on to impact residential sales,” Puri added. <cmsannotation type="cmsannotation" annotationid="New launches may remain muted" comment="subhead" text="New launches may remain muted">New launches may remain muted</cmsannotation> According to Puri, new launches across the country overall may remain muted in the coming year. “We may see muted new launches in the new year as many developers would rather wait and watch how the global and Indian markets pan out over the year and if all goes well then we may see new launches increase in the second half of 2023,” Puri said. However, new launches in the Jan-Sept period of 2022 surpassed full-year readings of 2019 with approximately 2.65 lakh units launched in the nine-months period, according to Anarock data. MMR, Hyderabad, Pune have been ruling the charts for the last two quarters in terms of new launches. <cmsannotation type="cmsannotation" annotationid="Property rates to rise in 2023" comment="subhead" text="Property rates to rise in 2023">Property rates to rise in 2023</cmsannotation> That’s just one side of the coin. Hurt by low demand, many developers have not been increasing property rates for the last few years. But input costs have started hurting construction companies and the overall property rates increased by 5-7% in 2022. Next year, the real estate price hikes will be steeper at around 8% at least next year, according to Puri. This however might not affect demand as much, a few developers feel. Younger generation wants to own a home instead of renting – and this mindset change will aid real estate companies. “We have seen housing prices rise by 5-8% in 2022 but property sales remained robust as real estate became a favorite asset class among potential homebuyers. This momentum is likely to continue next year as developers are wary about the positive home buying sentiment and consumer’s goal for financial security,” Rahul Purohit, national sales head, Square Yards, told Business Insider India. Price increases, developers say, have little effect on intent to own homes as they have proven to be the best asset class for investment as compared to gold and equities. “Property price corrections won’t deter affordable home buying plans as consumers have full confidence in real estate as the best asset class,” Purohit added. Property demand is expected to be high across tier 1 cities, according to Square Yards. Reopening of offices, and increased business activity will guide residential demand in Mumbai, Delhi, Noida, Bangalore, Hyderabad, Gurgaon and Chennai. Demand is also expected to be high in Ahmedabad, Lucknow, Kochi, Indore, Agra, Varanasi, Gwalior etc. due to the massive infrastructural growth seen in these cities. Hiring in the real estate industry increased 10% in November on both month-on-month and year-on-year, according to foundit (formerly known as Monster) Insights Tracker (FIT) – indicating that the sector anticipates better times ahead. <cmsannotation type="cmsannotation" annotationid="The luxury of growth" comment="subhead" text="The luxury of growth">The luxury of growth</cmsannotation> The growing wealth of Indians and increased number of HNI or high networth individuals is another factor that’s fuelling the demand for luxury homes. Several reports suggest that the luxury house segment has acquired a lion’s share in overall home sales numbers in the year 2022. According to a recent survey conducted by India Sotheby’s International Realty, a larger number of HNIs are proposing to buy luxury property in the next two years. “Various real estate consultants cited that sales of luxury apartments witnessed significant growth month on month during the year. The Mumbai Metropolitan Region accounted for more than half of these sales,” Ram Raheja, managing director at S Raheja Realty, told Business Insider India. Raheja further added, “Enabled by a much higher purchasing power to the steep rupee fall — the Indian currency has breached the 82-mark against the US dollar — NRIs are also viewing this as a great opportunity to build bigger and better assets back home.” Apart from celebrities like Janhvi Kapoor and Madhuri Dixit and many more, startup founders and stakeholders too are people keen on the luxury housing market. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/whatsapp-working-on-feature-to-let-users-report-status-updates/articleshow/96479567.cms">WhatsApp working on feature to let users report status updates</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/covid-19-random-testing-of-international-arriving-passengers-begins-at-delhi-airport/articleshow/96473834.cms">Covid-19: Random testing of international arriving passengers begins at Delhi airport</a>

Housing demand outlook 2023: Interest rates, global spillovers to play a key role

<ul><li><keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> announced that inbound travellers to India from <keyword id="174513" type="General" weightage="20" keywordseo="G20-countries" source="Orion">G20 countries</keyword> will be able to use <keyword id="6358921" type="General" weightage="100" keywordseo="UPI" source="Orion">UPI</keyword> for merchant payments. </li><li>India holds the Presidency of the G20 from December 1, 2022, to November 30, 2023. </li><li>In January, NPCI <a href="https://economictimes.indiatimes.com/wealth/spend/upi-payment-extended-to-inbound-travellers-nris-coming-to-india-rbi/articleshow/97717972.cms?utm_source=contentofinterest&amp;utm_medium=text&amp;utm_campaign=cppst">allowed </a>UPI platforms to onboard NRIs from 10 countries to use UPI with international mobile numbers and Indian bank accounts. </li><li>“International visitors will get to experience digital India without the hassle of carrying cash and dealing with haggling,” said Ravi Battula, VP, merchant acquiring business, Wibmo. </li></ul>From the backwaters of Kerala to the havelis of Rajasthan, there’s a lot about India that excites foreign tourists — but even in the digital age, they’re often stuck paying for these experiences in cash, especially in remote areas. India’s central bank is looking to change this situation. On Wednesday, Reserve Bank of India governor Shaktikanta Das announced that inbound travellers to India from G20 countries will be able to make payments via UPI (Unified Payments Interface). "UPI has become hugely popular for retail digital payments in India. It is now proposed to permit all inbound travellers to India to use UPI for their merchant payments (P2M) while they are in the country. To begin with, this facility will be extended to travellers from G-20 countries arriving at select international airports,” said Das. G20, whose presidency India took over last December, is a group of 20 nations – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, South Korea, Japan, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union. Launched by the National Payments Corporation of India (NPCI) in 2016, UPI is an indigenous real-time payment system that allows users to link more than one bank account in a single smartphone app and transfer funds. UPI is also compatible with most digital wallets and payment applications, like GPay, Paytm, PhonePe, and others. There are only four things required to transfer funds via UPI: a smartphone, an active bank account, an active mobile number linked to the bank account, and an internet connection. "This convenience will make India a more desirable destination for international travellers. Moreover, the implementation of UPI in the travel industry will reduce the risk of fraud and enhance the security of financial transactions, further increasing the appeal of India as a tourist destination," shared Nishant Pitti, CEO and co-founder, EaseMyTrip. In January, NPCI <a href="https://economictimes.indiatimes.com/wealth/spend/upi-payment-extended-to-inbound-travellers-nris-coming-to-india-rbi/articleshow/97717972.cms?utm_source=contentofinterest&amp;utm_medium=text&amp;utm_campaign=cppst">allowed </a>UPI platforms to onboard non-resident Indians (NRIs) from 10 countries to use UPI with international mobile numbers and Indian bank accounts. The countries are — Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, UAE, and UK. <cmsannotation type="cmsannotation" annotationid="Reduce international tourists’ dependence on cash" comment="subhead2" text="Reduce international tourists’ dependence on cash">Reduce international tourists’ dependence on cash </cmsannotation> After the pandemic-induced lockdown was lifted, India once again saw a steady influx of foreign tourists with foreign tourist arrivals (FTAs) in June 2022 <a href="https://tourism.gov.in/sites/default/files/2022-09/India%20Tourism%20Statistics%20at%20a%20Glance%20200%20%28Eng%29.pdf">registering </a>a staggering 1,349% growth over June 2021. However, international tourists travelling to India struggle with the ease of transactions. Especially in remote corners of the country where ATMs are non-existent or non-functioning – and when carrying a large volume of cash can be dangerous – digital payments are the way to go. Ravi Battula, vice president of merchant acquiring business at <keyword id="1399736" type="General" weightage="50" keywordseo="digital-payment" source="Orion">digital payment</keyword> solutions company Wibmo, called it a “leapfrogged advancement” in the UPI journey, demonstrating the “power of true real-time payment to the world”. “International visitors will get to experience digital India without the hassle of carrying cash and dealing with haggling. With grass-roots enablement of UPI, this will drive higher commerce from incoming travellers while ensuring the safety of the visitors, as they won’t be carrying large amounts of cash,” added Battula. Moreover, while card-based payment requires a point of sale (POS) terminal, digital payments through UPI only require a quick response (QR) code that’s quick and easy to scan. Simply put, through UPI, users can shop and pay bills simply by scanning a QR code to pay a person, a business, or a service provider. “The RBI’s announcement of extending the scope of UPI to international travellers shows that UPI is making inroads globally. This facility will reduce their dependence on cash and make the process of payments easier for them,” said Anup Nayar, CEO-domestic at In-Solutions Global, a fintech venture. UPI has today become the norm with everyone — be it a rickshaw puller, a cab driver, an online grocery app or a roadside tea stall – using it. Regulated by RBI, UPI is widely regarded as the first step by the Indian government to move towards a cashless economy. The pandemic further pushed the adoption of UPI with people preferring digital, cashless transactions to the hassle of cash exchange. As of January 2023, 385 banks are <a href="https://www.npci.org.in/what-we-do/upi/product-statistics">live </a>on UPI. Together, these banks achieved over 800 crore transactions, with a collective value of nearly ₹13 lakh crore in January 2023. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/hopefully-this-is-last-rate-hike-by-rbi-in-current-cycle-industry-experts/articleshow/97729735.cms">Hopefully, this is last rate hike by RBI in current cycle: Industry, experts</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/personal-finance/news/how-you-can-handle-the-higher-home-loan-emi-burden/articleshow/97725816.cms">Don't be in a hurry to prepay but plan for EMIs better say experts as home loan rates rise</a>

Now, tourists from G20 countries will get to use UPI instead of cash in India

Mumbai, Jun 15 () Kerala-based CSB Bank on Monday reported narrowing of losses in the March quarter to Rs 59.69 crore as against Rs 150.64 crore in the year-ago period. For FY2019-20, it reported a net profit of Rs 12.72 crore as against a loss of Rs 197.42 crore in the year-ago period. Its chief executive and managing director C V R Rajendran said the yearly profit could have been higher by Rs 225 crore, which was set aside as provisions for a variety of purposes, including the ongoing COVID-19 pandemic. He said the bank will focus on the gold loan segment and is targeting to increase total contribution from the vertical to 35 per cent in FY2020-21 from the present 31 per cent. Despite a tendency to redeem loans at the beginning of the year, it has seen an addition of Rs 125 crore on the loanbook in this segment since April, he said. The bank's gross non performing assets ratio reduced to 3.54 per cent from the year-ago's 4.87 per cent, while the provision coverage ratio was over 80 per cent. Rajendran attributed the Rs 225 crore provisions to a higher than RBI-mandated provisioning of Rs 93 crore, not utilising an option to amortise fraud provision of Rs 22 crore and Rs 4 crore due to impact of COVID-19 pandemic. During the reporting quarter, its core net interest income inched up to Rs 157.54 crore from the Rs 120.50 crore in the year-ago period on a 7 per cent increase in the loanbook and a 0.70 per cent widening in net interest margins to 3.2 per cent. The non-interest income grew to Rs 87 crore from Rs 46 crore. The Thrissur-headquartered bank will add 103 branches during FY2021 and will focus more on the business opportunities outside of its home state of Kerala, Rajendran said. When asked about concerns surrounding remittances, Rajendran said the bank's diaspora deposits have grown by Rs 110 crore since April and attributed the same to money gotten back by the NRIs as they return to settle back in their homeland. The bank's promoter Fairfax owns nearly 51 per cent of the bank and Rajendran hinted that there is no plan for a dilution at present, and added that the grouping has time till 2023 to go down to 40 per cent. CSB Bank shares closed 5.01 per cent up at Rs 141.60 apiece on the BSE on Monday as against a correction of 1.63 per cent on the benchmark. AA MR MR MR

CSB Bank reduces losses to Rs 59.69 cr in Jan-Mar

If you’ve been reading the news, you’ll know that the Indian <keyword id="6355302" type="UNKNOWN" weightage="20" keywordseo="Rupee">rupee</keyword> hasn’t had an easy go if it as off late. After hitting<a href="https://www.businessinsider.in/the-indian-rupee-is-at-its-weakest-since-january-2017-and-will-probably-keep-falling/articleshow/64190730.cms"> a 17-month low </a>earlier this year in May, the currency hovered around the below-70 mark (when compared to the US dollar) for the rest of the summer, before <a href="https://www.businessinsider.in/turkish-lira-crisis-leads-india-to-the-largest-rupee-drop-in-5-years/articleshow/65398211.cms">breaching the 70-mark</a> for the first time in history on August 14th owing to the effects of the Turkish lira crisis and the widening of India’s trade deficit. This morning, it touched a record low of 70.32, causing panic among investors. While the rupee is expected to stabilise, the short-term impacts of its free-fall will be felt throughout the economy. Here’s how the depreciation of the currency will affect the average Indian. A foreign degree and overseas <keyword id="6354692" type="UNKNOWN" weightage="20" keywordseo="Travel">travel</keyword> will be more expensive Parents looking to send their children abroad for studies will probably have a rethink. In August 2008, the rupee was around 43 to the dollar. This means that in the span of ten years, the rupee has depreciated by 62% in nominal terms. A foreign degree in 2018 is a lot more expensive than it used to be, and will affect parents and students who have taken out education loans. What’s more, even the cost of overseas holidays has gone up. In most Western countries, the daily cost of food, lodging, transport and shopping for Indian tourists will be a lot more - necessitating a budget reduction. <keyword id="6354775" type="TECHNOLOGY" weightage="20" keywordseo="Smartphones">Smartphones</keyword> and other imported items will cost more A number of items that we use everyday like smartphones, computers and cars require components that are imported from abroad. The decline in the rupee will make these imported items more expensive to producers and assemblers in India, who will factor in these costs when setting the price of the final product. Additionally, all finished goods that are imported from abroad, from iPhones to Froot Loops Cereal to Audi sedans, will be more expensive after being converted into rupees. <keyword id="4869" type="PERSON" weightage="20" keywordseo="Fuel">Fuel</keyword> prices will go up Unlike electronic items, as mentioned above, the consumption of certain imports cannot be cut down. The global price of oil is dictated in dollar terms. As India imports 80% of its oil, the price of fuel for Indian consumers will have to rise because oil companies will not be able to bear the burden of higher costs alone. This means that everything from daily transport costs to taxi fares will increase. As a result of the higher fuel costs, a lot of essential items that are transported, like agricultural produce, will be more expensive to transport, leading to higher food prices. Inbound remittances will increase All is not bad news, however. Payments sent home to India by NRIs or Indian citizens living abroad will be higher in absolute terms. People will likely rush to take advantage of the rupee’s fall and pricing difference to send more money back home. While low-skilled workers will continue to send the same amount regardless of exchange-rate volatility, it is mostly richer Indians who will send more money back for investment purposes such as real estate purchases. This has a beneficial effect, as higher remittances will increase the country’s foreign reserves.

Here’s how the rupee’s nose-dive will affect you

Budget 2016 has made prospective home buyers happy because of two reasons; one, the construction completion deadline for getting tax breaks under Section 24 has been extended from 3 to 5 years and two, the FM has announced an additional tax benefit of Rs 50,000 under Section 80EE for buying a house on loan. 
 Therefore, if you are looking forward to investing in some property or buying a new home for the first time in a Tier-2 town, here is ET’s list of <keyword id="6377036" type="UNKNOWN" weightage="100" keywordseo="smart-cities">smart cities</keyword> that you should put your money in. 
 
Bhubaneswar and Cuttack 
 These twin cities are amongst the fastest growing IT and educational hubs in the eastern region of the country, which has resulted in a boost in the <keyword id="6354553" type="COMPANY" weightage="100" keywordseo="real-estate">real estate</keyword>. Not only this, the fact that most of the available land is government owned has made the real estate market well-regulated. North and south-west of Bhubaneswar is set for new developments, because of Infocity-1 and KIIT's deemed university. 
 
Visakhapatnam 
 
The largest city in Andhra Pradesh in terms of area and population also houses one of the largest harbours in India. In the last 5 years, Visakhapatnam has also drawn the attention of real estate investors, who have options of investing in several residential locations. 
 
Chennai 
 
One of the four metro cities in the country, the capital of Tamil Nadu offers both industrial and residential areas. While in North Chennai, industry dominates the circuit, central Chennai is more of a commercial and residential market. On the other hand, South and West Chennai offer residential areas. 
 
Coimbatore 
 
Known as the 'Manchester of South India,' for its burgeoning textile and spinning industry, this city has in the recent past diversified beyond textile to include general engineering, automobile parts manufacturing and IT/ITeS, resulting in a boom in the real estate. Gandhipuram flyover, Ring Road, Western and Eastern Bypasses, and airport expansion are also the reasons for the growing real estate scene. 
 
Kochi 
 
Counted in Indian government's smart city list, this city is also a favorite of many IT businesses. The commercial hub of Kerala also has the international airport and sea port as the factors responsible for its development in the real estate sector. Moreover, residential real estate in Kochi is also majorly owned by NRIs, with only 30% of end users being locals. Kakkanad, Thripunithura, Maradu and Aluva. Properties in Edapally, Kaloor and Vytilla are the places of one’s interest for real estate. 
 
Pune 
 
It’s not an unknown fact that Pune has been a favorite of the IT industry; moreover, its proximity to Mumbai is also a major driving factor, because of the Mumbai-Pune. While affordable options start from Rs 15 to Rs 30 lakh, the premium segment starts at Rs 1.3 crore and luxury projects can go up to Rs 2.5 crore. 
 
Ahmedabad 
 
One of Gujarat's largest business and trading hubs, the city offers a wide employment landscape driven by the textile, engineering, chemical and automobile industries. Not only this, it also attracts both talent and investors from across the country. East, south and north Ahmedabad offer good deals in property, while Ambawadi, Navrangpura, Shahibaug and Nehru Nagar come in the premium segment. 
 
Indore 
 
This city in Madhya Pradesh offers both an IIM and an IIT, which is why it is one of the fastest developing cities of the state. A strong pharma and auto industry presence has also influenced its real estate market. One can also find hot deals in the Super Corridor, which is an upcoming area, having IT industries like TCS and Infosys. Other than this, BRTS, Major Road (MR) 12, the Delhi-Mumbai Industrial Corridor are also the attractions of this city. 
 
<a href="http://newshub.ridlr.in/wp-content/uploads/2015/11/Pune.jpg">Image source</a>

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