Selling property by pr-nri-in singapore
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 March 2012
Sir,
An NRI acquired PR of Singapore and was doing job there, from the savings of his salary and Bank loan purchased a residential property there. Susequently he shifted to India and is doing job in a metro city for the last 2yrs. If he disposes of the above property of Singapore and after setting of the loan, amount received -
a) can this amount be transferred to his NRE Account already being maintained in India-And
b) how this amount be trated for Income tax purposes in India ie whether this amount will be taxable or notIf yes at which rates intimate the appropriate provisions of Income tax Act 1961. Thanks in advace. With regards.
An NRI acquired PR of Singapore and was doing job there, from the savings of his salary and Bank loan purchased a residential property there. Susequently he shifted to India and is doing job in a metro city for the last 2yrs. If he disposes of the above property of Singapore and after setting of the loan, amount received -
a) can this amount be transferred to his NRE Account already being maintained in India-And
b) how this amount be trated for Income tax purposes in India ie whether this amount will be taxable or notIf yes at which rates intimate the appropriate provisions of Income tax Act 1961. Thanks in advace. With regards.
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 March 2012
Dear experts,
Pl reply my above querry urgently. Thanking you.
k.k.jandial
Pl reply my above querry urgently. Thanking you.
k.k.jandial
23 July 2025
Here’s a clear, structured answer to your query about tax implications and fund transfer for a **PR-holding ex-NRI selling property in Singapore**:
---
## ✅ **FACTS:**
* The individual was a **PR (Permanent Resident) of Singapore**, earning salary abroad.
* He purchased a **residential property in Singapore** from salary + bank loan.
* He moved back to **India 2 years ago**, now working in India.
* Now he intends to **sell the Singapore property**, repay the loan, and **remit the remaining funds to India**.
---
## 🔍 **Key Issues:**
### 1. **Can the amount be transferred to his NRE Account?**
### 2. **Is the gain taxable in India under the Income Tax Act, 1961?**
---
## 🔸 **1. Transfer of Funds to NRE Account**
👉 **No**, funds **cannot be directly credited to NRE account** by a person who is **resident in India** (as per FEMA definitions).
Since he has been in India and working for the **last 2 years**, he is now a **Resident (R)** under FEMA as well as Income Tax Act.
> ✅ You may remit the funds to an **Ordinary Resident Rupee Account (Resident Account)** or **Resident Foreign Currency (RFC) Account**, but **not to an NRE account**.
---
## 🔸 **2. Income Tax Treatment in India**
### ✅ **Residential Status:**
* As he is residing in India for the last 2 years, he qualifies as a **Resident and Ordinarily Resident (ROR)** for tax purposes in India.
### ✅ **Tax Implication of Foreign Property Sale:**
* As a **ROR**, **global income is taxable in India** under Section 5(1) of the Income Tax Act, 1961.
* Hence, **capital gains** from sale of property in **Singapore is taxable in India**.
---
## 🔸 **Computation of Capital Gains in India**
* Sale of a **foreign residential property** is treated as **capital gains** under **Section 45**.
* If held for **>24 months**, it is treated as **Long-Term Capital Gain (LTCG)**.
### 🔹 **Indexed Cost of Acquisition**:
You can apply **indexation benefit** to the original cost (converted to INR at time of purchase).
### 🔹 **Capital Gain =**
(Sale Price – Indexed Cost – Transfer Charges – Loan Repayment, if any, not considered as cost).
Only **cost of acquisition/improvement** and **transfer expenses** are deductible — **loan repayment is not deductible** for capital gain computation.
---
## 🔸 **Tax Rates (For LTCG)**
| Type | Tax Rate |
| -------------------------------------------- | ------------------------------------------ |
| Long-Term Capital Gain (on foreign property) | 20% + surcharge + cess |
| Short-Term Capital Gain | Added to total income, taxed at slab rates |
You can **claim foreign tax credit (FTC)** if Singapore has levied any capital gains tax (though Singapore generally does **not** levy CGT on personal property sales).
---
## ✅ **Relevant Sections of Income Tax Act, 1961**
* **Section 5(1):** Scope of Total Income (global income for ROR)
* **Section 45:** Capital Gains
* **Section 48:** Mode of computation (with indexation)
* **Section 54/54F:** Not applicable since it’s a foreign property, unless reinvested in India (under strict conditions)
* **Rule 128:** Foreign Tax Credit
---
## 📌 **Action Points for You**
1. **Convert SGD values to INR** using the exchange rate on **date of acquisition and sale** (per Rule 115).
2. Compute **capital gains in INR** with indexation.
3. Include the gain in your **ITR (likely ITR-2 or ITR-3)**.
4. Pay tax before **31st July** (if no audit) or **31st October** (if under audit).
5. Use **Form 67** if claiming Foreign Tax Credit.
---
Let me know if you'd like:
* A sample **capital gains computation**.
* Help choosing the right **ITR form**.
* Details about **RFC accounts** or **tax planning suggestions**.
---
## ✅ **FACTS:**
* The individual was a **PR (Permanent Resident) of Singapore**, earning salary abroad.
* He purchased a **residential property in Singapore** from salary + bank loan.
* He moved back to **India 2 years ago**, now working in India.
* Now he intends to **sell the Singapore property**, repay the loan, and **remit the remaining funds to India**.
---
## 🔍 **Key Issues:**
### 1. **Can the amount be transferred to his NRE Account?**
### 2. **Is the gain taxable in India under the Income Tax Act, 1961?**
---
## 🔸 **1. Transfer of Funds to NRE Account**
👉 **No**, funds **cannot be directly credited to NRE account** by a person who is **resident in India** (as per FEMA definitions).
Since he has been in India and working for the **last 2 years**, he is now a **Resident (R)** under FEMA as well as Income Tax Act.
> ✅ You may remit the funds to an **Ordinary Resident Rupee Account (Resident Account)** or **Resident Foreign Currency (RFC) Account**, but **not to an NRE account**.
---
## 🔸 **2. Income Tax Treatment in India**
### ✅ **Residential Status:**
* As he is residing in India for the last 2 years, he qualifies as a **Resident and Ordinarily Resident (ROR)** for tax purposes in India.
### ✅ **Tax Implication of Foreign Property Sale:**
* As a **ROR**, **global income is taxable in India** under Section 5(1) of the Income Tax Act, 1961.
* Hence, **capital gains** from sale of property in **Singapore is taxable in India**.
---
## 🔸 **Computation of Capital Gains in India**
* Sale of a **foreign residential property** is treated as **capital gains** under **Section 45**.
* If held for **>24 months**, it is treated as **Long-Term Capital Gain (LTCG)**.
### 🔹 **Indexed Cost of Acquisition**:
You can apply **indexation benefit** to the original cost (converted to INR at time of purchase).
### 🔹 **Capital Gain =**
(Sale Price – Indexed Cost – Transfer Charges – Loan Repayment, if any, not considered as cost).
Only **cost of acquisition/improvement** and **transfer expenses** are deductible — **loan repayment is not deductible** for capital gain computation.
---
## 🔸 **Tax Rates (For LTCG)**
| Type | Tax Rate |
| -------------------------------------------- | ------------------------------------------ |
| Long-Term Capital Gain (on foreign property) | 20% + surcharge + cess |
| Short-Term Capital Gain | Added to total income, taxed at slab rates |
You can **claim foreign tax credit (FTC)** if Singapore has levied any capital gains tax (though Singapore generally does **not** levy CGT on personal property sales).
---
## ✅ **Relevant Sections of Income Tax Act, 1961**
* **Section 5(1):** Scope of Total Income (global income for ROR)
* **Section 45:** Capital Gains
* **Section 48:** Mode of computation (with indexation)
* **Section 54/54F:** Not applicable since it’s a foreign property, unless reinvested in India (under strict conditions)
* **Rule 128:** Foreign Tax Credit
---
## 📌 **Action Points for You**
1. **Convert SGD values to INR** using the exchange rate on **date of acquisition and sale** (per Rule 115).
2. Compute **capital gains in INR** with indexation.
3. Include the gain in your **ITR (likely ITR-2 or ITR-3)**.
4. Pay tax before **31st July** (if no audit) or **31st October** (if under audit).
5. Use **Form 67** if claiming Foreign Tax Credit.
---
Let me know if you'd like:
* A sample **capital gains computation**.
* Help choosing the right **ITR form**.
* Details about **RFC accounts** or **tax planning suggestions**.
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