Capital Gain on Sale

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Capital Gain on Sale/Transfer of Immovable Properties for NRIs – N.D. Savla & Associates

For Non-Resident Indians (NRIs), selling immovable property in India — whether residential, commercial, or land — attracts capital gains tax under the Income-tax Act, 1961. The gains are classified as short-term or long-term, and buyers are required to deduct TDS at source before making payment. At N.D. Savla & Associates, we provide expert guidance on NRI property sale taxation in India, ensuring accurate computation, tax optimization, and smooth repatriation of funds abroad.

Overview

  • Short-Term Capital Gains (STCG): Property held for less than 24 months is taxed as per applicable slab rates.

  • Long-Term Capital Gains (LTCG): Property held for 24 months or more is taxed at 20% with indexation benefits.
    NRIs can claim exemptions under Sections 54, 54EC, and 54F by reinvesting in eligible assets. Additionally, the Double Taxation Avoidance Agreement (DTAA) helps prevent being taxed twice in India and the country of residence.

Features

  • Calculation of short-term and long-term capital gains on NRI property sales

  • Advisory on TDS implications for NRIs (20% + surcharge + cess for LTCG)

  • Assistance in claiming exemptions under 54, 54EC, and 54F

  • Advisory on DTAA relief to reduce tax liability

  • Support in obtaining Lower/Nil TDS Certificates under Section 197

  • Guidance on FEMA compliance and repatriation of sale proceeds

Documents Required

  • Passport & PAN card

  • Original purchase deed of property

  • Sale deed / draft agreement of sale

  • Bank account details (NRO/NRE)

  • TDS certificates (Form 16A / Form 26AS)

  • Property valuation report (if applicable)

  • Proof of reinvestment (new property or 54EC bonds for exemption)

Procedure

  • Property Review – Verify ownership, holding period, and transaction details.

  • Classification – Identify whether capital gain is short-term or long-term.

  • Computation – Apply indexation benefits for LTCG and compute liability.

  • Exemption Planning – Recommend reinvestment in residential property or bonds for tax savings.

  • TDS Reconciliation – Adjust tax deducted by the buyer against final liability.

  • ITR Filing – File NRI income tax return with capital gains schedules.

  • Repatriation – Facilitate FEMA compliance and repatriation of net proceeds abroad through an Authorized Dealer Bank.

Why This Matters

Many NRIs face higher TDS deductions on property sales, leading to excess tax blocked in India. Without professional support, they may also lose out on valuable exemptions or face delays in remittance abroad. With N.D. Savla & Associates, your NRI property capital gains tax in India is managed efficiently, ensuring compliance, maximum exemptions, and smooth transfer of funds overseas.