Summary:
From TDS on NRI sale of property to other tax laws and repatriation, Tax Assist handles every procedure without any need for the NRI’s physical presence.
Introduction:
The COVID-19 pandemic has already caused massive disturbance across the world, with death tolls mounting and economies of scale toppling. People are forced to stay put within their designated territories, affecting business to a great extent. With the dread of the pandemic still looming large and a potential cure being a far-flung option, property sale in a different country remains a bone of contention. But no need to keep your brows furrowed, as Tax Assist has the best professional team lined up to serve NRIs and global Indians concerning the TDS on NRI sale of property and every other tax obligation and fund repatriation procedures.
What Are the Tax Implications Imposed on Nris On Property Sales in India?
If an NRI decides that he will sell his property in India to an Indian purchaser, there are some tax implications that he has to abide by.
TDS:
The TDS for sale of property by NRI is immediately deducted, and the tax is payable by the Indian purchaser. Both parties should be thoroughly aware of the TDS on NRI sale of property as it is different from when an Indian resident sells a property and therefore, might account for a financial loss if they are not adequately aware. The TDS for NRI selling property amounts to a 20.66% reduction of the selling price in case of obtaining a long-term capital gain, implying that the property has been in possession for 24 months or more. The TDS on NRI sale of property depends upon the entire value of the property irrespective of its selling price. Since there exists a lot of confusion amongst the buyers and sellers for a property that has been held for less than 24 months, TDS for sale of property by NRI amounts to 33.99% of income tax irrespective of his income tax slab.
TDS Exemption:
The NRI can also apply for a waiver upon the payment of TDS for NRI selling property under the auspices of the DTAA or the Double Taxation Avoidance Act. It can be applied after the purchaser has filed the TDS. For this, the NRI needs to submit a tax residency certification from his residing country to the Income Tax officer.
Capital Gain Tax in India for NRI:
The procedure for the payment of capital gain tax in India for NRI involves two routes- a long-term capital gain tax or a short-term capital gain tax. If the property in concern was held for more than 24 months by the NRI, a long-term capital gain tax in India for NRI is exacted at 20% with the respective indexation benefits. With the applicable surcharge and cess, it amounts to 20.6%. The Income Tax Department of India deems the short-term capital gain tax in India for NRI to be the difference between the purchasing and the selling pierce, in case the property was in the NRI’s possession for less than 24 months.
Capital Gain Tax Exemption:
The exemption for long-term capital gain tax in India for NRI is also possible if the NRI opts to invest his capital gains by purchasing capital gain bonds with a lock-in period of 5 years, within six months of the property transaction.
Repatriation Procedures:
After the transaction is complete, the remittance of the funds also takes a longer route. The LRS declaration has to be filed under FEMA, 1999, through the ICICI Bank a2 form or any other standardized a2 forms, along with the relevant details of the beneficiaries, their accounts, the currencies, the applicable Swift codes, etc. The form 15ca denotes the transparency of every bit of source funds, the purpose of remittance, taxation rules adhered to, and the like. In contrast, the form 15cb is a certification from a distinguished Chartered Accountant, only in cases of the remittance exceeding INR 5 lakhs.
How to Avoid All These Complications?
With the assistance of the devoted team of Tax Assist, an NRI can opt to bypass all these complications. He can simplify every procedure that involves the sale of property in India and the subsequent repatriation of funds by seeking the help of Tax Assist. The Tax Assist team is a specialist in everything ranging from NRI and International taxation laws, including Double Taxation Avoidance Act, to the repatriation of funds, 15ca, and 15cb certifications completed with RBI and Tax clearances. The certifications involving TDS for NRI selling property and necessary exemptions, property law compliance, and property valuation are also managed efficiently using a notable government-registered valuer.
With Tax Assist working at the forefront, the NRI can stay relaxed as the procedures can be fulfilled efficiently without his physical presence in the country. Once the necessary documents like the ICICI Bank a2 form, RBI clearances, 15ca, and 15cb certificates and the others are arranged, the fund repatriation takes only 3 to 25 days. Team Tax Assist is noted for its diligence involving end-to-end solutions and iDesk services for every NRI and global Indians, and therefore they can be trusted without any effort.
In the End:
The entire process developed by Tax Assist involving property sale, documentation, and subsequent repatriation is failsafe and secure. Therefore, the hassle of being physically present in India during the pandemic can be avoided by the NRI.
