I am an NRI in the process of selling family home. It is owned by my mother, brother and I. I am the only one in India with a power of attorney. I have obtained PAN cards for all of us. My intent is to repatriate the funds back to the US. The collector rate for the property is 3 Cr. How much tax will the sellers pay? Do I get this tax back next year? I have permanently moved back to India from the US.
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It will attract long term capital gains
2) any sale of long-term assets after July 23, 2024, will be taxed at 12.5% without the indexation benefit.
individuals can now choose between a 12.5% tax rate without an indexation benefit and a 20% tax rate with an indexation benefit.
3) consult a local CA regarding tax payable by you
The buyer will deduct TDS @22.5% out of the sale consideration amount hence you need not pay any tax other than this LTCG tax deducted at source.
Since this money belongs to all of you,, it would be better that you split the amount to all and then repatriate individually to reduce tax implications wherever possible.
- If the said POA is executed in India , then it must be registered from the office of the registrar , otherwise you cannot sell the property on their behalf.
- Further, as the said property belong an NRI sells , then the buyer is liable to deduct TDS @ 20%.
- Further, if if the property is sold before completion of 2 years from the date of purchase, the buyer is liable to deduct TDS @ 30%.
- Further, you can apply for a NIL/lower deduction certificate to the Income Tax Department when the TDS is more than the seller’s tax liability and the the assessing officer will determine the TDS after calculating the capital gains.
- However, you can claim a refund on the TDS deducted when the TDS is more than the tax liability if you will not obtained the NIL/lower deduction certificate.
Dear Client,
Non-resident Indians selling a family home in India are liable to capital gains tax computed at the current value of ₹ 3 Crore of the house. LTCG tax at 20% is applicable when holding periods are more than two years and therefore the tax payable comes to about ₹60 Lakhs. An STCG tax may be attracted at the rate of tax as applicable for that income slab may be attracted depending on the amount of income. The buyer will subtract TDS from the amount and any extra amount of TDS can be claimed if the income tax returns are being filed. It is allowed to bring up to USD 1 million per a financial year received from the sales proceeds to the NRE account provided necessary forms have been filed. In regards to FEMA and Income Tax Act it is suggested to consult a tax consultant or lawyer.
Hope you find this answer beneficial for resolving the dispute.
When an NRI sells property in India, the buyer is liable to deduct TDS @ 20%. If the property is sold before completion of 2 years from the date of purchase, the buyer is liable to deduct TDS @ 30%.
