you need to consult a lawyer in USA in this regard
2) NRI can gift his house to relative in india . it should be by gift deed duly stamped and registered
3) possession delivered to donnee
Income of property sale
NRI, sold house in India,and within 2 years invested in buying a new flat in india,by equal or more amount of sale,so no question of Long Term Capital Gain tax in India, since this sale amount was not taken out of india ,is there any tax liability in USA ?
Asked 8 years ago in Property Law
Religion: Hindu
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5 Answers
can NRI gift this house to relative without consideration,and that relative afterwards sale this property and invest equal or more amount to buy new flat?
Asked 8 years ago
If the NRI is still n Indian citizen then there is no need to pay taxes on such transaction in US.
What NRIs must pay attention to is the income tax implications in their country of residence. Many countries tax their residents on their income regardless of where it originates from, while others provide partial or total exemption on capital gains arising on sale of a residential house if certain conditions are met. The most important point to ponder is the income tax liability in the country of residence on the amount of gain, and whether claiming exemption under Sections 54/54F/54EC is really worth it. The NRI may, in fact, be better off claiming only partial or no tax exemption on the capital gains in India.
Gifts that are not taxable at all are those that are received from relatives. Even NRIs are covered as long as they fall in the category of relatives. Therefore an individual Indian resident can receive a tax free gift from an NRI as long as he/she is that individuals relative.
Note on gifting on immovable properties
There is a valuation aspect involved in gifting of immovable properties:-
If the property is gifted without any consideration then if the stamp duty value exceeds Rs. 50000/-, stamp duty value will be taken
If the property is gifted for a consideration, then the actual value of the property will be taken.
As mentioned earlier NRIs can also give gifts to resident Indians
1. The income/gain has not been generated in USA,
2. So, no Income tax is payable at USA on this account.
1. For the relative, it is not capital gain but gain out of gift which she/he further invests in buying dwelling house,
2. He/she is not required to pay any income tax on this account.
There is no question of tax liability in US when the sale proceeds was not taken out of India. A gift is always without consideration. The NRI is at liberty to gift his property. The donee will be liable to short-term capital gain if the property is sold in less than 3 years. The relevant date would be the date of registration.
