Government has introduced many tax rules for the NRIs (Non-Resident Indians) who wants to sell their property in the country. But the tax is applied as per the status of the residence and the ownership of the property. As per the Income Tax Department rules, tax is not levied on the heritage property in India so far.
NRIs attract short-term capital gains (STCG) tax or long-term capital gains tax (LTCG), TDS and applicable cess and surcharges by selling a property or real estate. It is mandatory for individuals to pay tax while selling the inherited property or the immovable property in India, whether in spite of the status of their resident, whether it is Indian or non-resident Indians.
If a person wants to calculate the exact IT liability on the property sale then he must calculate the distinct gains as short term or long term. According to the ongoing rule, if a real estate is held for more than two years then it is considered as long term capital asset and if it is held for less than the mentioned year then it is short term.
For calculating long term capital gains, a person has to adjust the indexation benefits first and then the cost of acquisition must be subtracted from the selling price. As per the ongoing rule, the tax cut of the long term capital gains is 20 per cent while for the short term capital gains it depends on the income tax slabs for NRI and applicable education cess and surcharge. It will be calculated depending on the total taxable income of the NRI in the country.
Read Also: Revisit History of Income Tax Slabs in India
TDS is also applied on the sale of property by NRI. If the property goes on sale after two years then 20 per cent of TDS will be cut, whereas if the property is sold before the mentioned time period, then 30 per cent of TDS is cut.
Hello,
Please inform if for an NRI LTCG is payable on the entire sale price of the property or just on the profit earned on indexed sale price of the property.
Thanks
Sanjay
LTCG is always payable on the amount of Capital Gain earned.