Can NRIs declare a refund on LTCG tax?

I’m a non-resident Indian (NRI) residing in Dubai. I’ve a Rs2 lakh month-to-month systematic funding plan (SIP) in fairness mutual funds. I’ve additionally invested in some debt funds and I get a refund yearly for tax deducted (TDS) at supply on this. 

I want to churn my portfolio yearly earlier than 31 March and reinvest the identical by the monetary year-end. Will the long-term capital positive factors (LTCG) tax replicate within the 26AS certificates? Can I declare a refund since I wouldn’t have any earnings from India? 

—Name withheld on request 

TDS is deducted on long-term capital positive factors and short-term capital positive factors earned by NRIs on each debt and fairness mutual funds. TDS is deducted in your PAN particulars. Once the deductor deposits this TDS with the federal government and recordsdata their TDS return, the TDS deducted then seems in your Form 26AS. At the tip of the monetary 12 months, that you must estimate your whole taxable earnings and the tax legal responsibility on such earnings. In case you wouldn’t have any tax payable, you might be allowed to say a refund of the TDS deducted. 

My father-in-law is seeking to promote his property and repatriate the proceeds to Canada.  What is the efficient approach to do that and restrict our tax legal responsibility?

—Name withheld on request 

The guidelines for taxation of LTCG from the sale of a home property located in India are the identical for NRIs and resident Indians. Since the property is located in India, the positive factors will probably be taxable in India. 

Gains from the sale of a property held for a interval exceeding two years are taxed as LTCG. These are taxable at 20% (plus 4% cess) after indexation of the price of acquisition of the property. Any prices of enchancment are additionally allowed to be listed and deducted.

Where property has been held for 2 years or much less, the positive factors from its sale are thought of as STCG and taxed in accordance with slab charges. An NRI is allowed to say exemption on LTCG by reinvesting them to buy one other property both one 12 months earlier than or two years after or assemble a property inside a interval of three years. However, this property should be located in India. If you don’t want to buy a property, these capital positive factors may additionally be invested in capital positive factors bonds, which have a lock-in interval of 5 years and earn an curiosity of round 5% which is absolutely taxable. 

Archit Gupta is founder and chief govt officer, Clear.in.

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