NRIs are taxed at the same rate as non NRIs. If property is owned for more than two years, then they fall under the 20% tax slab. If it’s a short term sale (owned for less than 2 years) then NRIs are taxed at the applicable tax rate based on total income taxable in India.
NRIs should also be aware of TDS on sale of property. There’s a 22.8% TDS that the buyer has to deduct for a property owned for more than 2 years. For ownership of less than 2 years, buyer has to deduct TDS of 30%. This TDS can be reduced through a special request to the Income tax department.
Property management in Chennai, or India for that matter is a whole different ball game. First, the scope of PM is wider and critical than in other countries and second, the common PM functions are much more challenging.
The top 4 challenges for a property manager are
- Preventing Property theft – The biggest challenge is property protection, we have to make sure that property is always owned by the true owner and someone doesn’t fake documents and sell it.
- Finding problem-free tenants – Stories of tenants refusing to vacate is not that uncommon in Chennai. Finding good tenants involves a thorough background check and calls for having certain “vacatable-tenant” criterias.
- Ensuring quality maintenance – When hiring someone for fixing repairs, you can’t just send in a contractor and hope the job will be done to satisfaction. First, you need to send a trusted handyman and on top of it, send a supervisor to monitor the quality of work. With labor shortages in Chennai, the quality of work is taking a huge hit.
- Monitoring Land – Since many own land in India, PM services also include managing/monitoring of land to avoid encroachments, violations and other issues.
Although, the scope is wider and no shortage of challenges with common PM functions, Property management is still a rewarding job.