NRIs selling a house in India |Save Taxes

This Video is for you if:
1. You are an NRI
2. You are selling a Residential property/house in India
3. The Residential property is held by you for a period of more than 24 months
4. Any you want to save taxes by reinvesting in any other asset
It means we are not considering here sale of commercial property, commercial plot, residential plot, land, mutual funds, gold etc.
Also, if property is sold within 24 months from its date of purchase, then exemption discussed below will not be available. It means assets should be long term capital asset.
We are only talking about individuals. And this article is framed, specifically keeping NRIs sellers in mind.
When NRI sell a house in India, there are chances that he is having huge long term capital gain on which he has to pay tax at the rate of 20% + Surcharge+ Edu Cess.
If he wants to save this capital gain taxes then he has following two options available:
1. Investing in another Residential Property (Section 54)- Explained in detail in video
2. Investing in Government Specified Bonds (Section 54EC)- Explained in detail in video
Other Points NRI seller should keep in mind:
1. Above exemptions are available only to reduce capital gain taxes and can be claimed at the time of filing tax return in India. It has nothing to do with TDS which buyer has to deduct while paying sale consideration. You cannot insist buyer to deduct TDS at lower rate as you are investing in another residential property or specified bonds.
2. To reduce TDS rate, you can apply for Lower/NIL TDS deduction certificate with your Assessing officer. But don’t expect that AO will issue you the certificate without looking into the proves of above investment claim. This practically impossible situation as you cannot do investment unless you will get the sale proceeds.
3. If you are selling a Short-Term Capital Asset than taxes will be applicable as per slab rate and exemption under section 54 and 54EC are not applicable.
4. In case of NRI seller, basic exemption limit of INR 2.5 lakh cannot be adjusted from Long term capital gain. Which means Long term capital gain on sale of house will be taxable at flat rate of 20%+ Surcharge+ Edu cess.
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