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Purchase and sale of property

Purchase and Sale of Property

Purchase and Sale of Property

What are the Tax Implications for the NRIs who want to sell property

The NRIs who want to sell their property which is in India, have to pay tax on the Capital Gains. The payable Tax on the gain, depends on whether it’s a Short Term or a Long Term Capital Gains. When a house property is sold, there are two cases:

  • There is a Long Term Capital Gain, after a period of 2 years from the date it was owned.
  • There is a Short Term Capital Gain, in case, it is held for 2 years or less.

Tax Implication in case of Inheritance

Suppose, the property has been inherited. In that case, you always have to consider the date of purchase from the side of the original owner for calculating whether it’s a Long Term or a Short Term Capital Gain. In such a case, the cost of the property shall be the cost incurred to the previous owner.

How to save tax on the Capital Gains?

NRIs are allowed to claim exemptions under the section 54 and Section 54EC on Long Term Capital Gain from the sale or purchase of property in India. ‘Ajay Sawhney and Associates’ is backed by its office in New Delhi and caters the best accounting services in India.