• Indian property sale for US citizen

I am a US citizen.
i bought a land in india 2005 for 2 lakhs. I sold it in 2019 feb for 50 lakhs. i bought another land in india for 22 lakhs in Jun 2019. what are my tax liabilities in India as well as in USA ?
Asked 6 years ago in Taxation

First answer received in 10 minutes.

Lawyers are available now to answer your questions.

23 Answers

You have to pay tax on 23  lakhs  approximately.

Kindly provide date of purchase and date of sell so provide you exact figure

Your exact taxable value is 23,21,368/-

 

Twenty three lakhs twenty one thousand three hundred and sixty eight rupees.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

This is capital gains tax in India. For USA in which state you live accordingly that state income needs to calculate.


This is capital gains tax in India. For USA in which state you live accordingly that state income needs to calculate.


This is Capital gain tax in India and in US in which state you live accordingly that state tax will be applicable. Do let me know all details of USA.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

See since you have earned same in India same shall be taxable in India, it is long term capital gain and your CA can calculate exact tax amount as per the indexation.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

See in US there laws shall apply and you need to seek advice from tax attorney there that on remittance and taking amount there what is your tax liability. As far as India is considered since income.earned in India tax here shall be applicable.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

India and US have a double taxation avoidance agreement so for the tax paid in India you shall get benifit in US as credit.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

under the DTAA, there are two methods for an NRI to seek relief from taxes: the tax credit method, and the exemption method. With the tax credit method, income is generally taxed in both countries – but you may claim tax relief in your current country of residence. However, with the exemption method, the NRI will be taxed in full in one country and exempted in another.

Double taxation relief methods

There are two methods which countries can use to reduce or relief the double taxation problem. These methods called the exemption method (EM) and the foreign tax credit method (FTC).

The EM method requires the home country to collect the tax on income from foreign sources and remit it to the country where it arose.Tax jurisdiction extends only to the national border. When countries rely on territorial principle as described above, they usually depend on the EM method to relieve double taxation.


NRIs can avoid double taxation (meaning: getting taxed on the same income twice in the country of residence and India) by seeking relief from DTAA between the two countries. Under DTAA, there are two methods to claim tax relief – exemption method and tax credit method. By exemption method, NRIs are taxed in only one country and exempted in another. In tax credit method, where the income is taxed in both countries, tax relief can be claimed in the country of residence.

 

You need not pay tax in the USA under DTAA.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

The long term capital gain tax would be applicable to you.in India though you are not liable for any tax in abroad for the same. 

Devajyoti Barman
Advocate, Kolkata
23655 Answers
537 Consultations

NRIs who are selling house property which is situated in India have to pay tax on the Capital Gains.

Long term capital gains are taxed at 20% and short term gains shall be taxed at the applicable income tax slab rates for the NRI based on the total income which is taxable in India for the NRI.

When an NRI sells property, the buyer is liable to deduct TDS @ 20%. In case the property has been sold before 2 years(reduced  from the date of purchase) a TDS of 30% shall be applicable.

NRIs are allowed to claim exemptions under section 54 and Section 54EC on long term capital gains from sale of house property in India.

T Kalaiselvan
Advocate, Vellore
90025 Answers
2497 Consultations

Under double taxation avoidance agreement pact you may not pay any tax in US on this.

The Double Tax Avoidance Agreement (DTAA) is a tax treaty signed between two or more countries to help taxpayers avoid paying double taxes on the same income. A DTAA becomes applicable in cases where an individual is a resident of one nation, but earns income in another.

T Kalaiselvan
Advocate, Vellore
90025 Answers
2497 Consultations

For the income you have earned in US, you may have to enquire it locally about the taxes to be paid however for the income through this property sold in India, you may not have to pay any tax in US under the said pact.

The DTAA, or Double Taxation Avoidance Agreement is a tax treaty signed between India and another country ( or any two/multiple countries) so that taxpayers can avoid paying double taxes on their income earned from the source country as well as the residence country.

India has Double Taxation Avoidance Agreements (DTAA ) with 88 countries out of which 86 are in force. For transactions involving persons having interest between countries with which India has a DTAA, there are agreed rates of tax and jurisdiction on specified types of income

DTAA between India and USA. The Double Tax Avoidance Agreement is a treaty that is signed by two countries. ... DTAA does not mean that the NRI can completely avoid taxes, but it means that the NRI can avoid paying higher taxes in both countries

T Kalaiselvan
Advocate, Vellore
90025 Answers
2497 Consultations

Us taxation is covered by double taxation avoidance Treaty in India and in case you earn any amount and pay taxes as per the Indian tax system the credit you can get in in US tax payment your income in United state is not concerned in calculation of your tax in India you have to pay only the long term capital gains on the property you sold out in India and you can take the credit of amount of tax paid in India in case it is applicable for the long term capital gains

Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

If you are a US citizen then you have to pay taxes for the property you sold in India to the Indian government.

Also as you had a significant earning the percentage of tax you have to pay can be determined by a US attorney as US laws shall be applicable.

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

In India around 30 percent. Although there are ways to be exempt from it.

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

NRIs who sell purchased property after three years from the date of purchase will incur long term capital gains tax of 20 percent.

Mohammed Mujeeb
Advocate, Hyderabad
19327 Answers
32 Consultations

Long term capital gain on profit - indexation price. 23% in India. This can be saved by investing by purchasing another property.

Yogendra Singh Rajawat
Advocate, Jaipur
23083 Answers
31 Consultations

1.For registering sale deed, you either require PAN No. or OCI No, in India.

 

2. If you have used Indian PAN no., then you shall have to pay the long term capital gain tax after indexation which will be 10% in India.

 

2. If you do not take the said amount in USA, then no I.Tax is attracted in USA.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

1. If the balance amount of Rs.28 lakhs  after reinvesting Rs.22 lakhs for buying house in India has been kept with Indian Bank then you wont have to pay I.Tax in USA for the interest earned on the said amount kept with Indian Bank.

 

2.  There can not be double taxation on single earning.            

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

1. If the balance amount of Rs.28 lakhs  after reinvesting Rs.22 lakhs for buying house in India has been kept with Indian Bank then you wont have to pay I.Tax in USA for the interest earned on the said amount kept with Indian Bank.

 

2.  There can not be double taxation on single earning.            


1. If the balance amount of Rs.28 lakhs  after reinvesting Rs.22 lakhs for buying house in India has been kept with Indian Bank then you wont have to pay I.Tax in USA for the interest earned on the said amount kept with Indian Bank.

 

2.  There can not be double taxation on single earning.            


If you have PAN card in India and the sales proceeds have been deposited with Indian Bank earning interest hereupon, then you shall have to pay I.Tax on the said earning in India to I.Tax department in India only.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

You will have to pay capital gain on 26 lakh rupees in India.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

For taxation laws of USA, you will have to consult some local attorney there.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

The Government of India has entered into Double Tax Avoidance Agreements (DTAA) with various countries to prevent the undue imposition of taxpayers. India and USA have a DTAA that comprehensively addresses and eliminates the incidence of double taxation of income on persons having income in both the countries.

According to the India USA DTAA, “Income derived by a resident of a Contracting State from immovable property (real property), including income from agriculture or forestry, situated in the other Contracting State may be taxed in that other State.”

Hence, in case of income from immovable property situated in India from the direct use, letting, or use in any other form of immovable property, the income from the immovable property would be taxable in India.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

If you pay the taxes in India then as per double taxation treaty you can't be charged in us again

Prashant Nayak
Advocate, Mumbai
34545 Answers
249 Consultations

1. As the property is sold in India so that money is taxable in India only. 

2. You have to pay a long term capital gain tax on the money which is left after purchase of another property which is around 20% of the capital gain. 

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer