Context 1. My parents passed away recently without a will. 2. I have given 2 of my sisters all liquid assets (bank savings, jewelry, furniture etc) between them. Sisters are Indian citizens 3. Dad built a house in Jabalpur in 1992 with 40% fund contribution from me. 4. The house is listed for sell at Rs 1.50 crores and getting offers from both Hindu/Muslim buyers 5. I am a foreign citizen. I file ITR in India. I have PAN Questions 1. What is the best way to avoid Capital Gains Tax (CGT) on sell of the house or at least reduce it? Do I pay CGT on sell of inherited property? 2. How do we calculate CGT? How does circle rate relate to CGT? 3. Would it benefit if I be a seller being a foreign citizen? I am concerned about dealing with tax issues and run around all by myself (if any). My sisters can grant me “No Claim Deeds”. 4. Would it benefit if my 2 sisters become the sellers, they being citizens of India? I can grant them “No Claims Deed” 5. How do I approach payment terms? Cash, Check? Full or Advance payment? Who pays the registration and stamp duty? What other expenses buyer will pay? 6. Do I hire a local broker/ CPA/ Attorney adept at drafting sell agreement and executing buyer payments based on local conditions? Please share tips, do’s and don’ts as applicable Thanks
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Shubham Goyal
1. To purchase or construct new residential house property or purchase of capital gain bonds. To avail exemption you have to invest the capital gain amount. The maximum limit for purchase of bonds is Rs.50 lacs and time limitation is within 6 months from the date of the transfer of the original asset
2. Sale Consideration less transfer expenses less Indexed cost of acquisition. Sale consideration can not be less than the circle rate (i.e. stamp duty value). Tolerance limit is 10%
3. Being an NRI,TDS rate is higher and buyer has to obtain TAN and issue Form 15CA & 15CB before the remittance
4. TDS rate is 1% and buyer can file TDS return without obtaining TAN
5. Please accept all payments through banking channels. Buyer will pay registration expenses and stamp duty
6. Yes
W.e.f 23.07.2024 (Budget 2024), there are substantial changes on taxation of sale of residential house property
For detailed discussion you may contact at aroravivek1982@gmail
1.yes you have to pay CGT on sale of inherited property
To better understand tax implications you need to first get the valuation of property AS ON 01.04.2001
There are many way available to save and reduce CGT
2. If sale value is less than circle rate than circle rate will be considered as sale consideration for property
however if difference is upto 10% of sale value than circle rates will be ignored
rest your queries need detail discussion including taxable income of co owners
