In case of sale of property in India by NRI, following tax implications and compliances arises
- Buyer is liable to deduct TDS u/s 195 on the amount of consideration at the rate of 20% + surcharge + cess (4%). The rate of surcharge depends on the amount of consideration. The rate of surcharge is NIL upto Rs.50 lacs.
- Buyer is liable to file Form 15CB & 15CA
- Seller can apply for lower TDS deduction certificate and share with the buyer for deduction of TDS at lower rates
- To claim exemption of long term capital gain, seller can invest in a residential house property located in India
- Seller is liable to file ITR in India following the year in which the transaction took place. For FY 2022-23, due date of ITR is 31.07.2023.
Income tax is payable on the long term capital gain whereas buyer will deduct TDS on the consideration to be paid resulting into refund of TDS.
If he further reinvest the whole amount of LTCG as per the law and claim exemption then no tax would be payable resulting into refund of TDS.
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