LIVE GST Certification Course by CA Arun Chhajer. Register Now!!

LT capital gain & basic exemption

10 February 2021

My son is a US citizen. Today He got Long term capital gain of 2 Lakhs from sale of immovable property. Is he required to pay tax @ 20%? even though It is less than the basic exemption of 2.50 lakhs . Of course ITR will be filed on his behalf by me, being P. O. A. holder.

Reply
Follow
Share

4 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 10 February 2021

Yes 20% tax is leivable

CA Manivel Manickam (Chartered Accountant) (81 Points)
Replied 10 February 2021

Yes, Long Term Capital gain is taxable at 20%. Since he is a NRI, he cannot avail the basic slab exemption benefit of Rs.250000/-. Hence, even though the LTCG is less than Rs.2,50,000 he has to pay tax at 20%. Indexation benefit is available to him, hence he can compute the LTCG by considering Indexed cost of acquisition. (If the transferred asset is shares/Bonds/Debentures, the case is different). If you want to avail exemption from paying tax, you can made investment in certain bonds u/s 54EC etc..