Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Capital gains on saleof property by nri in india
Posted by: JoeClark, October 24, 2017 09:57AM
Hello Everyone,

I am an NRI having two joint flat purchased in year 1989 in mumbai having cost for Flat No.1 Rs. 7.75 Lakhs and Flat no.2 Rs.4.45 Lakhs. Both the Flats are joint Flats and there are two joint owners of Flats (Me & My Wife). I have sold both combined flats as a single unit for consideration of Rs.4.5 Crores (Agreement Value) in the year 2017. My queries related to these are as follows:

1. How do I calculate long term Capital Gains and where do i can invest the same amount (means whether I should purchase another property in India or any other investment that will be benificial for me)

2. Can I Transfer the full Consideration amount received in India to Canada, if yes, then whether it will effect my taxation under capital gains and how.

3. What will be the rate on TDS on property for NRI if I sold same flat.

4. What are the documents that are to be given to Buyer for calculation of capital gains tax and same will be paid and TDS return will be filed by buyer on my behalf to Income Tax Department. Please Guide me for the same.

Any Idea , Suggestions would be appreciated,


I didn't find the right solution from the internet.


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Re: Capital gains on saleof property by nri in india
Posted by: triad, October 24, 2017 06:42PM
You state you are NRI, where are you a resident? The US?

If the USA, is your question how to show the sale on your US tax return?

Re: Capital gains on saleof property by nri in india
Posted by: 47Percent, October 24, 2017 07:17PM

There are so many other details that are required to answer all your questions.

Assuming you are a resident of USA (green card holder/citizen), you have pretty much stepped in it. You WILL be double taxed.. and then will get some paltry discount to offset that fact.

Obviously you will be paying state taxes too, if any, on this.

Are you filing jointly. If you are, you can pretty much ignore this joint ownership and treat it as combined property.

What is the current cost basis of each of the property -- assuming it was rented and some depreciation taken in the US return sometime between then and now.

In India there is an inflation index adjustment to the cost basis. US doesn't do any such thing. So you will paying CG on the full difference.

I believe the TDS (withholding at source) is 20%; but the problem is convincing the concerned authorities of your inflation adjusted cost basis. They would want you to pay 20% on the full proceeds and have you start from there. You will have to grease many palms before you can arrive at some reasonable amount.

When you are an NRI, you are a pariah in both countries.

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