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NRI Selling Property In India

An NRI Selling property in India has a lot of procedures unlike an Indian Resident selling the property. Hence, it is necessary to make the right move before planning to sell your residential or commercial property in India. But how would you save yourself from those high tax deductions and make a profit out of your sell? Remember that one wrong move can lead you to scenarios like double taxation and other serious legal issues. Hence, it is always advised to approach the right consultant before you go ahead with the process. This can save your time as well and helps to resolve your property issues without much effort from you.

Nobilis is a one-stop solution that offers you a complete package of solution related to real estate in India by NRIs.

What we do at Nobilis - A Step by Step Guide to NRI selling property in India:

Here is a flowchart a step by step process involved in NRI selling property in India. Every NRI has to go through these basic processes while selling the property. Here we go..

Finding a buyer

While selling property, the primary task is to find a buyer. An NRI can sell his property only to an Indian, or another NRI or a Person of Indian Origin (PIO). An NRI cannot sell his property to aforeigner. An NRI can sell his agriculture land or a farm only to an Indian after seeking permission from RBI.

Agreement to Sell

After the buyer is identified, the next process is to execute an agreement to sell.

What are the major documents that have to be produced in order to get your agreement done?

Documents related to the cost of acquisition

You need to provide documents with regard to the initial purchase cost of the property ie. Registered Sale deed for acquisition of the property.

  • Documents related to cost of improvement:For improvements or renovation to the existing property, documents like bills, invoices and bank statements would have to be provided. This will add up to the cost and indexed accordingly.
  • Valuation Certificate:If the property proposed to be sold is purchased, acquired or inherited prior to 1st April 2001, then a Valuation Certificate from a certified valuer has to be obtained to assets the Cost of the property for Capital Gains purpose.
  • PAN Number: An NRI Selling property in India should compulsorily have PAN Number and the same has to be produced at the time of document verification.
  • Passport:An NRI should provide his passport as the identity proof. He can be a citizen of India or any other country.

Other than this, there are many other legal documents to be produced during the process, but these are the major documents that an NRI has to submit.

Lower Tax deduction Certificate

When an NRI sells property in India, the buyer is liable to deduct TDS at 20% (plus applicable cess and surcharge) on the value of sale consideration. To avoid the higher tax rates, they can apply for LTC (lower tax deduction certificate) based on Agreement of Sale with the proposed buyer.

TAN Number and Transfer of funds from buyer to seller:

Once Agreement is finalized, the buyer pays the advance and transfer the money to the seller. In this case, a buyer should hold the TAN number (Tax deduction and Collection Account Number). Only when the buyer has the TAN Number he is eligible to deduct the TDS or tax at source.

Registration of Property

Registration of your property is the process where you legally transfer your property rights to the buyer. It has to be legally registered at the sub-registrar’s office.

Filing of TDS and Income tax returns

On sale of property in India, the seller has to file the income tax return after the end of financial year ie. After 31st March.

TDS returns also have to be filed by the buyer of property to claim the tax deduction by seller at the time of income tax filing.

If the seller is a resident of foreign country, he will have to disclose the sale in that country and claim credit of taxes paid in India.

You can avoid paying tax twice by adopting the double taxation avoidance agreement. This can be done in two ways, one is the exemption method and the other one is a tax credit method.

  • Exemption Method: Under the exemption method, specific income is taxed in one of the two countries and exempted in another country.
  • Tax Credit Method: Under the tax credit method, the income is taxed jointly with the countries mentioned in the income tax treaty.

If you are an NRI residing in Australia or the USA you have an exciting benefit when you opt for taxation services at Nobilis - NRI Taxation. We help file your income tax returns in both countries. i.e., India as well as Australia/USA.

Repatriation

Repatriation refers to the conversion of foreign currency to one's local currency. Once the property is sold and money is transferred to your NRO account, you can transfer these funds to your local bank account abroad using repatriation and remittance of funds as defined by RBI. The RBI has set certain limits on how much currency you can transfer from India to abroad under the “Liberalized Remittance Scheme”. According to the Liberalized remittance scheme, 2004 it is permitted to transfer USD 2,50,000 per financial year.

We at Nobilis, understand the value of your time are very proactive when it comes to the tax matter we ensure to give you the right advice in time. We ensure to keep your data is shared and saved securely in the cloud. To achieve this objective Nobilis uses a specialized and sophisticated client data management software.

Contact us for more details
www.nritaxation.co.in
7259877722