How are NRIs taxed on sale of property?

I’m an NRI (non-resident Indian) residing in Singapore. I purchased a property in August 2010 for ₹30 lakh in Noida. I’ve offered that flat in November 2022 for ₹55 lakh. I need to know the way I might be taxed on the sale of the property.

—Name withheld on request

There is not any distinction between taxation for NRIs on sale of residential property as in comparison with resident Indians. NRIs who’re promoting home property which is located in India must pay tax on the capital positive factors.

The tax that’s payable on the positive factors relies on whether or not it’s a brief time period or a long run capital acquire.

When a home property is offered, after a interval of two years from the date it was owned— there’s a long run capital acquire. In case it’s held for two years or much less—there’s a short-term capital acquire. Tax implications for NRIs are additionally relevant within the case of inheritance.

In case the property has been inherited, keep in mind to think about the date of buy of the unique proprietor for calculating whether or not it’s a long run or a brief time period capital acquire. In such a case the price of the property shall be the associated fee to the earlier proprietor.

Long time period capital positive factors are taxed at 20% and quick time period positive factors shall be taxed on the relevant revenue tax slab charges for the NRI based mostly on the entire revenue which is taxable in India for the NRI.

Tax deducted at supply (TDS)

When an NRI sells property, the client is liable to deduct TDS @ 20%. In case the property has been offered earlier than 2 years(decreased from the date of buy) a TDS of 30% shall be relevant.

NRIs can declare exemptions beneath Section 54, Section 54 EC, and Section 54F on long-term capital positive factors.

Therefore, an NRI can take good thing about the exemptions from capital positive factors when submitting a return and declare a refund of TDS deducted on capital positive factors.

Exemption beneath Section 54 is on the market on long-term capital positive factors on the sale of a home property. The exemption can be accessible beneath Section 54EC when capital positive factors from the primary property sale are reinvested into particular bonds.

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

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