NRI Guide To 

 Property Taxes In India

NRI Property Rules

Property sale rules differ for NRIs & resident Indians. NRIs can’t sell agricultural land, plantation property or farmhouse to another NRI or Person of Indian Origin (PIO). But residential/commercial property can be sold to a resident, NRI or a PIO.

Tax Payable

 NRIs have to pay taxes on the capital gains made from selling house property. If property is sold within two years from the date of purchase, STCG rates are applicable, as per the NRI’s taxable income in India.

Short Term Capital Gains

Tax Payable

 If an NRI sells a property after two years, Long-Term Capital Gains (LTCG) taxes      @20%    become applicable. 

 Long Term Capital Gains

 TDS  

STCG TDS rates of  30% are applicable. 

TDS rate for Indian residents selling house property is 1% of its sale value NRIs selling property  within two years  of purchase

If the property is sold after two years, LTCG TDS rates at the rate of  20%  are applicable

TDS 

 TDS rates are calculated on the sale value of the property and not on the capital gains. Surcharge rate increases with the rise in the property value  which in turn augments the overall TDS rates.

Surcharge

If the TDS is more than your tax liability, you will get a tax refund after filing your taxes. If you want to avoid the refund process, you can apply for a certificate to deduct TDS at a lower rate with the Jurisdictional Assessing Officer of the IT Dept.

Reducing TDS

 Many countries tax the income of their residents regardless of where it originates. While some provide exemptions on capital gains from the sale of residences, others don’t. Check if your country of residence has a DTAA with India.

Double Taxes

If the money has to be repatriated abroad. It is to verify that your money is from a legal source and all taxes have been paid.

 Repatriating Money

Once you sell the property, you need to get two certificates from a CA: 

Form 15A (Declaration of remitter) Form 15CB

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.