Short term capital gain tax of sale of residentioial propert

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2012 Purchased under construction flat in June'2010 at Rs 75 Lacs. 100% Payment was made from my NRE account. Now wish to sale it at Rs 96 Lacs.

a) What will be Short Term Capital Gain tax on this gain, after adjusting cost inflation index,
b) Can I repatriate Rs 75 Lacs (principal amount which was paid from of NRE a/c.)

I am an NRI for last 35 years, (present status as "RNOR" Resident but not ordinary resident). No other income in India, except interest on NRE & FCNR deposits which are Tax free. This year I will acquire NRE status again as will be going out of India for more than 180 days in this year. Never filled any IT Return, because no income in India. Now wish to file ITReturn by paying short term capital gain tax after sale of above property,

Querist : Anonymous

Querist : Anonymous (Querist)

03 April 2012 If any body can reply wpuld be helpful

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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25 July 2025 Here’s a detailed answer for your query on Short Term Capital Gain (STCG) tax and repatriation of funds from sale of residential property as an NRI/RNOR:

a) Short Term Capital Gain Tax Calculation
Facts:

Purchase price: ₹75 Lacs (June 2010)

Sale price: ₹96 Lacs

Property sold within 3 years (since under construction flat bought in 2010 and sold before June 2013)

Gain: ₹21 Lacs (₹96L - ₹75L)

Taxpayer status: RNOR (Resident but Not Ordinary Resident)

No other Indian income except tax-free NRE/FCNR interest.

Tax Treatment:
Since property is sold within 3 years of purchase, gain is Short Term Capital Gain (STCG).

For property, STCG is taxed as per your applicable slab rate, i.e., taxed as normal income.

Since you have no other income in India, your tax will depend on the slab rates applicable to your income.

Cost Inflation Index (CII) is not applicable to short-term capital gains. CII adjustment is only for Long Term Capital Gains (held for more than 36 months).

Calculation (rough):
Particulars Amount (₹)
Sale Price 96,00,000
Less: Purchase Price 75,00,000
Short Term Capital Gain 21,00,000
Tax Rate (assuming highest slab, say 30%) 6,30,000 (plus applicable surcharge and cess)

Additional:
You need to file Income Tax Return for the year of sale, reporting this STCG.

RNOR status means your global income is not taxable in India, only Indian income is taxable.

Interest on NRE/FCNR is exempt, but STCG from property sale is taxable.

b) Repatriation of Sale Proceeds
Since you paid 100% purchase price from your NRE account, you can repatriate up to the amount equal to the purchase price (₹75 Lacs) without restrictions.

Repatriation of the sale proceeds is allowed up to the purchase price from NRE/FCNR funds as per FEMA rules.

Gains (the ₹21 Lacs) cannot be repatriated freely without paying tax and following proper FEMA procedures.

You will need to submit:

Certificate from Chartered Accountant certifying purchase price,

Tax clearance certificate or proof of tax paid on gains,

Other FEMA related documentation to the bank for repatriation.

Summary:
Point Explanation
STCG Tax Taxed as per slab rates; no CII adjustment for STCG
Tax Filing Mandatory to file IT return reporting STCG
Repatriation Limit Up to purchase price (₹75 Lacs) from NRE account allowed
Documentation for Repatriation CA certificate and tax proof needed

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