Finance minister does not want foreign exchange from NRIs. Bad decision. The prime minister should advise the FM. She should be sensible that the inflation adjustment is the same for citizens and NRIs. Has she studied Economics? NRIs are toiling outside the country and sending FE, as the GOI is not able to provide employment to all her eligible youngsters. Very stupid decision.
To get breakeven in any case, if c -> ratio of ending indexation to starting indexation, (4*c - 2.5) / 1.5 will give the breakeven ratio (of sale value to buying value) so for the case if 9:13 in video , c = 3.63(363/100) and so breakeven will be 8.01333 10:12 in video c= 363/122=2.9754 , so breakeven will be 6.2677 If real sale value/buying value is greater than breakeven value, then the new scheme will be better
1) surcharge plus cess computation of actual LTCG seems explained 13:06 to 13:20 and surcharge plus cess computation for TDS seems explained 22:09 to 24:00 with important point TDS on sale price for NRI is not 20% but 12.5% (plus surcharge and cess) 2) Seems grey area if property was purchased jointly by Resident Indian and NRI (currently who is nri say son/daughter) and full payment was made by RI (father/mother), source of full fund RI’s account, could LTCG liability be fully taken on RI and could NRI avoid TDS, taking payment to NRO etc ? OR when purchase % of ownership not stated in original purchase deed 50% ownership by RI and 50% ownership by NRI followed for LTCG TDS etc to abide income tax rules?
If the source for purchase can be established in favour of RI, then the entire gain can be assisted under RI. It is advisable to apply for lower (or Nil) TDS certificate for RI for the full value of sale consideration under his/her name leaving out the NRI.
@@rdurairaj7522 Many thanks Sir for your kind valuable reply. Guess that for RI to request Nil or lower TDS, same Form 13 that requests nil or lower TDS approval would have to be used but selecting at the beginning of filling the Form 13, RI instead of NRI. What troubled us in experience of three cases of sale of apartments of NRI relatives was not TDS as much as the time, energy and anxiety spent on procedures, which also involved seeking cooperation with purchaser for TAN, 27Q, 16A etc. The three different auditors too were not as much quality, thorough and meticulous including for 15CB (and 15CA) for approval of outward remittance and needed our own learning from youtube etc to ensure timely, quality execution- in one go. Auditors charges ranged Rs 8500 including Annual tax return to Rs 45000 and Rs 50000 for the same work. Felt since relatives practically not used the properties much they would have better saved their time and energy even disregarding money part TDS etc and instead could have taken apartments on lease. May be it is the best for NRIs to keep less and less of getting tangled with Government departments (State and Central) except when essentially to deal with inherited properties. Again thanks for your kind valuable reply.
@@rdurairaj7522 Thanks Sir, for your valuable reply showing a procedure to try with IT authority. Form 13 login as RI seems have no lower tds sec 197 (1) relating to sale of property and the tds is also nil for property selling below Rs 50 lakhs and already a fixed 1% for Rs 50 lakhs to 1 lakh or so. There seems available selection 194 Ia. Since NRI’s interest as joint owner and one ready to take no payment due to zero contribution during purchase, perhaps better to file Form 13 by NRI login select sec 197(1) Sec 195 NRI sale of property request for lower TDS nil for nil payment. Also show in computation apart from case of Nil payment also alternate case of 50% payment and LTCG without indexation (NRI) and LTCG tax % on 50% sale price. In our case this LTCG tax% is 9% on 50% sale price. The Assessment Officer could scrutinise supporting documents for NRI to receive Nil payment and direct lower % Nil TDS (full payment to RI) OR higher % TDS say 9% (50% payment to NRI) instead of 12.5% TDS. Not an accounting person. Would like to proceed with Form 13 Sec 195 NRI ‘s request for nil TDS or lower % TDS deduction.
Thank you for the clarifications. Some of the heartburn towards the government has been reduced after these clarifications. But, overall the budget proposals for the salaried class be it residents or non-residents is not showing any let up. The FM boasts of having widened the tax base by an additional 58 lacs tax-filings this year. One needs to really ask her how many of the new filings were in the non-salaried or very high income groups ( the rich farmers or the fake farmers ,for example) ...
Is TDS of 20% (plus surcharge as applicable) to be calculated on sale consideration? Section 195 of act for NRI mentions TDS at specified rate on taxable capital gains . Can you please clarify if for NRI , TDS calculation is based on Sale Consideration or Capital Gains based on section 195. Thanks
Could you please clarify how the cost of acquisition is determined in the absence of indexation as per the new budget. Is the cost shown on the sale deed taken as the cost of acquisition ? Appreciate your inputs. Thanks
In case of OCI's - What if we buy a land and construct in it? can we add the cost of constructions towards the purchase cost? and what all receipts needs to be kept?
Very good video with a lot of information. Thank you very much to both of you. I had a question - What is the income tax rate for long term unlisted shares (held for more than 5 years) sale by NRI ? The transaction was done in May 2024. What will be the tax rate for the purpose of advance tax payment for FY 24-25?
*****It's a very important point that the tds for nris have changed from an effective rate of 23.92%to 14.95%.I haven't come across this particular point anywhere yet so thanks for highlighting this ****
Sir, Thank you for your informative Video. Given Social Security is paid by US Govt., can India tax Social security income after RNOR status expires? Or Socila security income always taxable by USA only ?
Hello Sirs, I assume the old law is still applicable for properties sold prior to 23rd July 2024 and indexation would be allowed for the NRI's for siuch sales prior to the 23rd July 2024? can you pl. reconfirm on this as I see many people here believe that indexation has been removed for the entire year ( i.e. for assessment year 25-26 onwards)- thanks in advance
When an Indian becomes a foreign National by naturalisation, later part of his life, he comes to India and lives for over 6 months will he be considered a Resident and the taxation will be as a resident or since he is a foreigner he will be taxed as NRI only?
Sir what will be the position for an NRI who has entered sale agreement prior to July 2024, but selling on say September 2024, whether indexation benefit would be available?
Dr.Chanerakant, please post an episode on RFC aka resident foreign currency account for returning NRIs or those indian citizens want to retire and come back.
Good discussion I am USA citizen. I have inherited property in India Question is if there are specific requirements to open bank account in India to facilitate transactions of money at the time of selling inherited property in the near future.I will appreciate your guidance. Thanks G kocharMD
Aa another NRI based in US holding an OCI card, I can say that you MUST have a bank account in India. Along with having a bank account you have to get a PAN card if you don't have one. These 2 items are a must for the buyer of your property to deduct the required TDS from sale proceeds and remit to the Indian Income tax dept (I will call here after ITR). Also the buyer of the property will be paying you the sale proceeds (minus the TDS) in INR and you do need a bank account. I am surprised that you don't have a bank account in India. remember that if you had any investments in India like Mutual Fund / stocks in your name or jointly with an individual in India and if the value exceeds $10K, For your reference copying below the FBAR reporting requirement in quotes. "A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year". You may want to keep the above in mind. When you sell the property and the money comes into your account (most likely more than $10K), as long as it stays in the account you have to file the FBAR. Of course you can repatriate the proceeds upto $1 mil the proceeds thru proper channel. Also remember that ITR will tax you on the cap gain, and this cap gain tax paid in India can be claimed in your IRS return filing as Foreign tax credit filing the appropriate form 1116 in your IRS filing to claim the tax credit. Note that reinvesting the cap gain in another property in India will not give you an escape from US cap gain taxes. IRS does not allow that for foreign held property, unless it was your PRINCIPAL RESIDENCE for 2 years. Hope this helps
For NRI,How much TDS to be deducted for sale after July23,2024 ?20% or 12.5%? Where can we get confirmation to this in the Finance act2024.Thanks for clarifying this .
Sir pls explain how to invest in rec capital gain purchase value 10 lakhs in 2012 , 20 th July sold at 1cr ... on 90 lakhs @12.5% to pay tax . Is there any room to invest in rec capital gain bonds rs 50 lakhs .. Pls explain with example sir 90 lakhs- 50 lakhs = 40 lakhs @12.5% to pay tax or on 90 lakhs to pay tax s pls clarify ....
No. The transfer will be under the 1 million dollar scheme if you are an nri not the lrs scheme. The 20% rule is for lrs echeme which is applicable for residents
Thanks for this information. As NRI , I have spent money on livable place, got it just four walls without any thing. Can I claim purchase cost + improvements cost over 25 years to make it livable? Thanks
The suggestion about avoiding or reducing LTCG Tax by either buying another residential property within the specified period or by investing in specific infrastructure bonds for 5 years is, as far as the NRIs are concerned, in my considered view, of dubious value. There is a saying in Tamil which goes like this: "In certain situations, your Karma (or sins) would still not be wiped out even if you go on a pilgrimage to Kashi!" Unless the NRI has any intention of returning and settling down in India permanently in the foreseeable future, it would be senseless and even foolish for an NRI to continue dealing with the Indian legal system, the Indian Income Tax department, the property registration department and other Indian agencies, once the NRI had disposed of any real estate property. The sensible move would be to repatriate immediately whatever amount could be salvaged from the sale amount to his/her bank account in the country of current residence and never look back!
Would agree with you. If no plans to return or if far away in future(in which case unlikely), better to have very little exposure with Indian tax/law systems
Nri ...Tds is higher than resident. They don't get rebate under section 87A, now LTCG.. it is a discrimination..Nri representation in parliament as good not there Nri will be disinterested in investment in india. For so many years they have been remitting over 100 billion annually. Surely they are hurt and unwanted
Does an OCI living in India and filing ITR every year falls under the new tax regime or can also avail the old tax regime to calculate the capital gains on property sale. I bought my property in 2005 at the rate of 22 lacs plus 1.87 lacs for registration and Rs:44 thousand for brokerage. Until this day, I have spent around Rs:30 thousand per year on avarage (total of 20 years as of today) for property wear and tear plus other improvement. I will also pay brokerage of 2% plus other applicable charges such as lawyer's fees before selling the said property, wherein, what would be my capital gains tax liability in this case. Please let me know. Thank you for your time and effort 🙏
Finance minister does not want foreign exchange from NRIs. Bad decision. The prime minister should advise the FM. She should be sensible that the inflation adjustment is the same for citizens and NRIs. Has she studied Economics? NRIs are toiling outside the country and sending FE, as the GOI is not able to provide employment to all her eligible youngsters. Very stupid decision.
Dr. Bhat, your questions were most appropriate and relevant. Sriram Rao has explained very well. Keep going.
To get breakeven in any case,
if c -> ratio of ending indexation to starting indexation,
(4*c - 2.5) / 1.5
will give the breakeven ratio (of sale value to buying value)
so for the case if
9:13 in video , c = 3.63(363/100) and so breakeven will be 8.01333
10:12 in video c= 363/122=2.9754 , so breakeven will be 6.2677
If real sale value/buying value is greater than breakeven value, then the new scheme will be better
excellent, very detailed answers!
Wonderful, great detailed explanation. Thank you
Thank you. My question was particularly on the TDS. Glad you asked at the end !
Excellent session by Mr Sriram with simpler explanations. Thanks Dr CKB , I have become a hardcore fan of you and your channel.
1) surcharge plus cess computation of actual LTCG seems explained 13:06 to 13:20 and surcharge plus cess computation for TDS seems explained 22:09 to 24:00 with important point TDS on sale price for NRI is not 20% but 12.5% (plus surcharge and cess)
2) Seems grey area if property was purchased jointly by Resident Indian and NRI (currently who is nri say son/daughter) and full payment was made by RI (father/mother), source of full fund RI’s account, could LTCG liability be fully taken on RI and could NRI avoid TDS, taking payment to NRO etc ? OR when purchase % of ownership not stated in original purchase deed 50% ownership by RI and 50% ownership by NRI followed for LTCG TDS etc to abide income tax rules?
If the source for purchase can be established in favour of RI, then the entire gain can be assisted under RI. It is advisable to apply for lower (or Nil) TDS certificate for RI for the full value of sale consideration under his/her name leaving out the NRI.
@@rdurairaj7522 Many thanks Sir for your kind valuable reply. Guess that for RI to request Nil or lower TDS, same Form 13 that requests nil or lower TDS approval would have to be used but selecting at the beginning of filling the Form 13, RI instead of NRI.
What troubled us in experience of three cases of sale of apartments of NRI relatives was not TDS as much as the time, energy and anxiety spent on procedures, which also involved seeking cooperation with purchaser for TAN, 27Q, 16A etc. The three different auditors too were not as much quality, thorough and meticulous including for 15CB (and 15CA) for approval of outward remittance and needed our own learning from youtube etc to ensure timely, quality execution- in one go. Auditors charges ranged Rs 8500 including Annual tax return to Rs 45000 and Rs 50000 for the same work.
Felt since relatives practically not used the properties much they would have better saved their time and energy even disregarding money part TDS etc and instead could have taken apartments on lease. May be it is the best for NRIs to keep less and less of getting tangled with Government departments (State and Central) except when essentially to deal with inherited properties. Again thanks for your kind valuable reply.
@@rdurairaj7522
Thanks Sir, for your valuable reply showing a procedure to try with IT authority.
Form 13 login as RI seems have no lower tds sec 197 (1) relating to sale of property and the tds is also nil for property selling below Rs 50 lakhs and already a fixed 1% for Rs 50 lakhs to 1 lakh or so. There seems available selection 194 Ia.
Since NRI’s interest as joint owner and one ready to take no payment due to zero contribution during purchase, perhaps better to file Form 13 by NRI login select sec 197(1) Sec 195 NRI sale of property request for lower TDS nil for nil payment. Also show in computation apart from case of Nil payment also alternate case of 50% payment and LTCG without indexation (NRI) and LTCG tax % on 50% sale price. In our case this LTCG tax% is 9% on 50% sale price. The Assessment Officer could scrutinise supporting documents for NRI to receive Nil payment and direct lower % Nil TDS (full payment to RI) OR higher % TDS say 9% (50% payment to NRI) instead of 12.5% TDS. Not an accounting person. Would like to proceed with Form 13 Sec 195 NRI ‘s request for nil TDS or lower % TDS deduction.
Excellent
It’s v useful, always mentioned NRI forget’s abt OCI 😔
Thank you for the clarifications. Some of the heartburn towards the government has been reduced after these clarifications. But, overall the budget proposals for the salaried class be it residents or non-residents is not showing any let up. The FM boasts of having widened the tax base by an additional 58 lacs tax-filings this year. One needs to really ask her how many of the new filings were in the non-salaried or very high income groups ( the rich farmers or the fake farmers ,for example) ...
Very well explained...clearly and correctly
Is TDS of 20% (plus surcharge as applicable) to be calculated on sale consideration? Section 195 of act for NRI mentions TDS at specified rate on taxable capital gains . Can you please clarify if for NRI , TDS calculation is based on Sale Consideration or Capital Gains based on section 195. Thanks
The major reason should be 1) NRI OCIs have no Voting power in India 2) Just NRIs who are still Indian Citizens are not coming for Voting.
Could you please clarify how the cost of acquisition is determined in the absence of indexation as per the new budget. Is the cost shown on the sale deed taken as the cost of acquisition ? Appreciate your inputs. Thanks
In case of OCI's - What if we buy a land and construct in it? can we add the cost of constructions towards the purchase cost? and what all receipts needs to be kept?
Please talk about NRI PIS & Non PIS accounts
Hi, what's the rate of tds in and after Sept 2023. There is huge confusion in tds rates
Very good video with a lot of information. Thank you very much to both of you. I had a question - What is the income tax rate for long term unlisted shares (held for more than 5 years) sale by NRI ? The transaction was done in May 2024. What will be the tax rate for the purpose of advance tax payment for FY 24-25?
Very useful and informative session
Much appreciated
I like your comment of non relevant Indians 😂👏time to pull out
*****It's a very important point that the tds for nris have changed from an effective rate of 23.92%to 14.95%.I haven't come across this particular point anywhere yet so thanks for highlighting this ****
Sir, Thank you for your informative Video.
Given Social Security is paid by US Govt., can India tax Social security income after RNOR status expires? Or Socila security income always taxable by USA only ?
Dear sir🙏🙏🙏pls money help me borrowed
@@Abimanyuduwhat are you trying to say
Hello Sirs, I assume the old law is still applicable for properties sold prior to 23rd July 2024 and indexation would be allowed for the NRI's for siuch sales prior to the 23rd July 2024? can you pl. reconfirm on this as I see many people here believe that indexation has been removed for the entire year ( i.e. for assessment year 25-26 onwards)- thanks in advance
What’s the taxation for nri selling property within 2 years ….whats the tds part and taxation part
When an Indian becomes a foreign National by naturalisation, later part of his life, he comes to India and lives for over 6 months will he be considered a Resident and the taxation will be as a resident or since he is a foreigner he will be taxed as NRI only?
Sir what will be the position for an NRI who has entered sale agreement prior to July 2024, but selling on say September 2024, whether indexation benefit would be available?
Dr.Chanerakant, please post an episode on RFC aka resident foreign currency account for returning NRIs or those indian citizens want to retire and come back.
There are detailed videos on RFC account on our channel. Please search it on the channel and be guided
Is the a chance that Indian government changes the act to avoid discrimation to NRIs?
Good discussion I am USA citizen. I have inherited property in India Question is if there are specific requirements to open bank account in India to facilitate transactions of money at the time of selling inherited property in the near future.I will appreciate your guidance. Thanks G kocharMD
Aa another NRI based in US holding an OCI card, I can say that you MUST have a bank account in India. Along with having a bank account you have to get a PAN card if you don't have one. These 2 items are a must for the buyer of your property to deduct the required TDS from sale proceeds and remit to the Indian Income tax dept (I will call here after ITR). Also the buyer of the property will be paying you the sale proceeds (minus the TDS) in INR and you do need a bank account. I am surprised that you don't have a bank account in India. remember that if you had any investments in India like Mutual Fund / stocks in your name or jointly with an individual in India and if the value exceeds $10K, For your reference copying below the FBAR reporting requirement in quotes.
"A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year".
You may want to keep the above in mind. When you sell the property and the money comes into your account (most likely more than $10K), as long as it stays in the account you have to file the FBAR. Of course you can repatriate the proceeds upto $1 mil the proceeds thru proper channel. Also remember that ITR will tax you on the cap gain, and this cap gain tax paid in India can be claimed in your IRS return filing as Foreign tax credit filing the appropriate form 1116 in your IRS filing to claim the tax credit. Note that reinvesting the cap gain in another property in India will not give you an escape from US cap gain taxes. IRS does not allow that for foreign held property, unless it was your PRINCIPAL RESIDENCE for 2 years. Hope this helps
For NRI,How much TDS to be deducted for sale after July23,2024 ?20% or 12.5%?
Where can we get confirmation to this in the Finance act2024.Thanks for clarifying this .
Sir pls explain how to invest in rec capital gain purchase value 10 lakhs in 2012 , 20 th July sold at 1cr ... on 90 lakhs @12.5% to pay tax .
Is there any room to invest in rec capital gain bonds rs 50 lakhs ..
Pls explain with example sir 90 lakhs- 50 lakhs = 40 lakhs @12.5% to pay tax or on 90 lakhs to pay tax s pls clarify ....
Hi sir, I heard UAE NRIs don't need to pay capital gain tax on Mutual Funds is that true?
Yes, the benefit can be availed on satisfaction of certain condition… there is a separate video on this issue… you can browse the playlist
Is the period of Long term still remains 2 years or 1 year?
2 years for immovable property
Can i include stamp duty/registration fees paid as part of acquisition cost ?
Yes also any GST or earlier VAT and Service Charge Paid can also be claimed as deduction
after tds is deducted at 12.5% for NRI property will they be paying 20% if they remit the balance😢
No. The transfer will be under the 1 million dollar scheme if you are an nri not the lrs scheme. The 20% rule is for lrs echeme which is applicable for residents
Thanks for this information.
As NRI , I have spent money on livable place, got it just four walls without any thing.
Can I claim purchase cost + improvements cost over 25 years to make it livable?
Thanks
Short answer No.
Purchase cost = Value of house in 2001
Improvements = only applicable to rental property (not on property where you live)
@@sanm4836 Thanks for your response. I do appreciate it
The suggestion about avoiding or reducing LTCG Tax by either buying another residential property within the specified period or by investing in specific infrastructure bonds for 5 years is, as far as the NRIs are concerned, in my considered view, of dubious value. There is a saying in Tamil which goes like this: "In certain situations, your Karma (or sins) would still not be wiped out even if you go on a pilgrimage to Kashi!" Unless the NRI has any intention of returning and settling down in India permanently in the foreseeable future, it would be senseless and even foolish for an NRI to continue dealing with the Indian legal system, the Indian Income Tax department, the property registration department and other Indian agencies, once the NRI had disposed of any real estate property. The sensible move would be to repatriate immediately whatever amount could be salvaged from the sale amount to his/her bank account in the country of current residence and never look back!
Would agree with you. If no plans to return or if far away in future(in which case unlikely), better to have very little exposure with Indian tax/law systems
Based on the 15.00 conversation I inherited the plot in 2008 and if I sell it should I have to pay the new tax based to tax man?
Yes based on new tax rate if you are an nri
Do you operate from Bangalore please 🙏
We do
Please send contact particulars etc sir
Frankie Points
It’s changed …this video is null and void
What has changed ? Why it is null and void?
Wilson George Johnson Linda Jones Jason
You folks are complicating with your explanation of taxes, i feel.
Nri ...Tds is higher than resident. They don't get rebate under section 87A, now LTCG.. it is a discrimination..Nri representation in parliament as good not there
Nri will be disinterested in investment in india.
For so many years they have been remitting over 100 billion annually. Surely they are hurt and unwanted
Does an OCI living in India and filing ITR every year falls under the new tax regime or can also avail the old tax regime to calculate the capital gains on property sale. I bought my property in 2005 at the rate of 22 lacs plus 1.87 lacs for registration and Rs:44 thousand for brokerage. Until this day, I have spent around Rs:30 thousand per year on avarage (total of 20 years as of today) for property wear and tear plus other improvement. I will also pay brokerage of 2% plus other applicable charges such as lawyer's fees before selling the said property, wherein, what would be my capital gains tax liability in this case. Please let me know. Thank you for your time and effort 🙏