Capital Gains on Sale of Property
This query is : Resolved
24 October 2010
Dear Sir,
I am an NRI who has bought an under construction residential property in India in Jan 2008. I want to sell the same now. Please advice what will be the date of purchase considered ie the date of the agreement or the date of the final handover of the house to me. So when will this property be considered as long term capital assets and what will be the tax rates in case it is considered to be short term capital asset.
In case if the sale value is more than75 lakhs do I need to take any Income tax clearance.
Your advice will be highly appreciated.
Thanks and Regards
I am an NRI who has bought an under construction residential property in India in Jan 2008. I want to sell the same now. Please advice what will be the date of purchase considered ie the date of the agreement or the date of the final handover of the house to me. So when will this property be considered as long term capital assets and what will be the tax rates in case it is considered to be short term capital asset.
In case if the sale value is more than75 lakhs do I need to take any Income tax clearance.
Your advice will be highly appreciated.
Thanks and Regards
25 October 2010
The date of transfer/acquisition of an immovable property should be taken as on the date of its actual possesion to the buying party or the date of its registration ,whichever is earlier.
Further regarding Income Tax clearance, I THINK, not sure, no Income Tax approval is required.
Further regarding Income Tax clearance, I THINK, not sure, no Income Tax approval is required.
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25 October 2010
Thanks but can someone please clarify about the Income tax clearance
18 July 2024
Income Tax Clearance (Section 195):
Sale Value Threshold:
As per current regulations, when an NRI sells a property in India and the sale proceeds exceed INR 75 lakhs, the buyer is required to deduct TDS (Tax Deducted at Source) at the rate of 20%. This is to ensure that the NRI seller has paid the appropriate capital gains tax.
Obtaining Tax Clearance Certificate (Form 15CA/15CB):
Before the buyer remits the sale proceeds to you, they will need to obtain a Tax Clearance Certificate (Form 15CB) from a chartered accountant. You, as the seller, will also need to submit Form 15CA online (after obtaining the 15CB) to the Income Tax Department. These forms certify that taxes applicable to your capital gains have been or will be paid.
Steps to Consider:
Calculate Capital Gains: Determine the sale value of the property minus expenses related to the sale and the indexed cost of acquisition (adjusted for inflation).
Consult a Tax Advisor: Given the complexity of NRI taxation and property transactions in India, it's advisable to consult with a tax advisor or chartered accountant who specializes in NRI taxation. They can ensure compliance with tax laws, optimize your tax liability, and guide you through the process of obtaining necessary tax clearances.
Sale Value Threshold:
As per current regulations, when an NRI sells a property in India and the sale proceeds exceed INR 75 lakhs, the buyer is required to deduct TDS (Tax Deducted at Source) at the rate of 20%. This is to ensure that the NRI seller has paid the appropriate capital gains tax.
Obtaining Tax Clearance Certificate (Form 15CA/15CB):
Before the buyer remits the sale proceeds to you, they will need to obtain a Tax Clearance Certificate (Form 15CB) from a chartered accountant. You, as the seller, will also need to submit Form 15CA online (after obtaining the 15CB) to the Income Tax Department. These forms certify that taxes applicable to your capital gains have been or will be paid.
Steps to Consider:
Calculate Capital Gains: Determine the sale value of the property minus expenses related to the sale and the indexed cost of acquisition (adjusted for inflation).
Consult a Tax Advisor: Given the complexity of NRI taxation and property transactions in India, it's advisable to consult with a tax advisor or chartered accountant who specializes in NRI taxation. They can ensure compliance with tax laws, optimize your tax liability, and guide you through the process of obtaining necessary tax clearances.
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