Tax on capital asset sold out of india

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VMS (Querist)
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24 January 2015 Hi,
Our client who had a capital asset (land & building) in U.K, sold it in october 2014.
How to caluculate capital gain and tax on capital gain for him considering him as resident and ordinary resident?
Will Indexation values of India can be considered for U.k property?
What are the tax implications if he wants to bring the sale proceedings to India?
Kindly help me in this regard.
Thanks in antecepation.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 January 2015 Since the property has been held for more than 36 months since its purchase, the gains, if any, arising from sale shall be taxable as long-term capital gains (LTCG).
While computing the LTCG, the purchase cost and the cost of improvement, if any, made subsequent to purchase shall be increased based on the cost inflation index published by the Income tax department.
You could avail an exemption from capital gains tax by re-investing the LTCG in a residential apartment or specified bonds . The quantum of LTCG re-invested can be claimed as exempt from tax. The balance LTCG shall be taxable at a flat rate of 20.60% (including education cess) assuming that your income exceeds the basic tax exemption threshold. The investment in the residential apartment or specified bonds has a lock-in period of three years. Accordingly, if the new property is sold or the bonds are converted into cash within a period of three years, the exemption claimed from LTCG in respect of the old property shall be revoked.
Further, if you have paid any taxes in the UK on the said income, you may also be eligible to claim a credit of taxes in India subject to examination of the provisions of the treaty.
As per the provision of the Act, effective from the FY12 onwards, an individual who qualifies as OR of India and who has assets located outside India is required to furnish details of assets located outside India such as foreign bank accounts, immovable property in the income-tax return.

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