• Sale of domain

Hello,

I bought a domain from an American seller and sold it to a American Buyer.
There was a gap of around 8/10 years between buying and selling time.
-Will the income/profit derived off such a domain sale come under Indian Income Tax rules ?
 I ask this because it was a complete foreign transaction.
-Can this be deemed to be an export and have some kind of Tax waiver ?
-If this comes under Indian Income Tax rules, how do I show it in ITR2 ?

I am filing the return as an Indian resident HUF.

Thanks
Asked 5 months ago in Income Tax

As you are resident the said transaction will be taxable under indian income tax laws. Kindly clarify whether this was your business profession for further calrity

Vidya Jain
CA, Kolkata
974 Answers
55 Consultations

4.8 on 5.0

- Domain name is treated as a capital asset. Profit/loss from such sale is an income from capital gain. In your case it is a long term capital gain as domain name was held by you more than 36 months. Such long term capital gain is taxable @20% special rate of tax alongwith ed. cess@4%.

 

For detailed discussion, you may consult telephonically. 

Vivek Kumar Arora
CA, Delhi
4408 Answers
527 Consultations

5.0 on 5.0

Hi,

Since you are filing the return as a resident HUF, this income from sale and purchase of domain would be taxable in India irrespective of the fact that it is foreign transaction. 

 

If you are routinely into purchase and sale of domain, it will be business income. However, if it is one off transaction, you can show it as capital gain. This will be LTCG if you have not used domain for business. You can then claim indexed cost of acquisition. If it is used for your business and you have claimed depreciation on the same, then this would be allowed to be reduced from the block of assets. If the block of intangible assets had only this asset, then it will be STCG/STCL as the case may be. 

You will have to disclose the same in ITR 2 under the Schedule CG.

 

Hope if clarifies. In case you need any consultation or assistance, please feel free to reach out to [deleted] or a telephonic consultation. 

Prerna Peshori
CA, Pune
40 Answers

5.0 on 5.0

Hi

 

Yes, this would be taxable in India.

 

If it's only one transaction and not a regular business, you will have to consider it as a long term capital gain.

 

You will have to file ITR 2.

Lakshita Bhandari
CA, Mumbai
5638 Answers
763 Consultations

5.0 on 5.0

Yes any income earned by a resident anywhere in world is liable to tax in India.

No tax waiver even if considered as export.

 

You need to discuss on call further details and filing related details.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
4008 Answers
64 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA