Do NRI Pay Property Tax In India? – Best Real Estate Company Kolkata, India | Top Building Developers Kolkata – Emami Realty Limited (2024)

FAQs

Do NRI Pay Property Tax In India? – Best Real Estate Company Kolkata, India | Top Building Developers Kolkata – Emami Realty Limited? ›

The Indian government has authorized NRIs, PIOs, and OCIs to acquire property in India, and they are not required to pay any kind of taxes while doing so. However, taxes must be paid by them if this property is sold.

If you buy property in India as NRI, you will be required to pay property tax here as well. Stamp duty and registration fees for the purchase apply along with the property tax. However, NRIs are eligible for deductions on these fees.

TDS with 20% shall be levied when the NRI bought the property via the non-resident and LTCG is taken. On purchasing via resident, NRI should deduct a 1% TDS when the sale rate surpasses Rs 50 lakh. Up to 80% of the whole property value, NRI can avail for the home loans.

For non-resident Indians (NRIs), long-term capital gains are subject to a flat tax^* rate of 20%.

Any income from a property situated in India, either rented or lying vacant, is taxable income for an NRI. To claim principal repayment of the loan as a deduction under section 80C. Also, stamp duty and registration charges paid on the purchase of a property can also be claimed under section 80C.

Whenever a property is purchased or sold in India, TDS must be deducted. The buyer deducts this TDS amount while paying the seller. The buyer's deducted amount must then be deposited with the Income Tax Department. The same rule applies to NRI (non-resident Indian) who is selling the property.

Income earned outside India is generally not taxable in India. Filing ITR: NRIs are required to file their income tax return in India if their total income in India exceeds the basic exemption limit (currently INR 2.5 lakh) or if they have to claim a refund for excess tax deducted at source (TDS).

NRIs can buy both residential and commercial property in India but not agricultural land, farm houses, or plantation properties. However, if an NRI is willing to purchase agricultural land in India, it requires permission from the Reserve Bank of India for doing so.

A Non-Resident Indian (NRI), can inherit immovable property in India in two ways: Valid Will, i.e., testamentary succession; or. Laws of intestate succession i.e., when a person passes away without writing a valid Will and the property is inherited as per the relevant succession laws in India.

How do I avoid capital gains tax on NRI? ›

Exemption through Specified Bonds: Exemption from capital gains tax for NRIs is applicable by reinvesting the amount in specified bonds within a specified timeframe under Section 54EC. The maximum exemption that can be claimed by investing in these bonds is ₹50 lakhs.

Operational PAN

A Permanent Account Number (PAN) is a must for all big-ticket transactions within the country. An NRI must get an operative PAN for selling the property as an operative PAN is required to apply for a Lower TDS certificate.

What is capital gains tax in India on property sale? The capital gain tax for the short term will be applicable as per the income tax slab rate. Based on your annual income, you will have to pay an applicable capital gain tax. However, in the long term, the capital gain tax payable will be 20.8% with indexation.

The OCI is an immigration status that was introduced to meet the demand for dual citizenship in India. Eligible OCI cardholders have to pay income tax in India on the income generated in the country. You can file your ITR online as an OCI on Indian income.

If you've taken a home loan for the purchase or construction of a property, then you can claim exemptions under this section even before buying or initiating the construction of your house. However, you have to complete the construction within three years to claim the maximum tax^* deduction of ₹2 Lakh.

Is There a Penalty for Not Declaring Your NRI Status? As per the FEMA guidelines, there is no penalty for not declaring your NRI status. However, you must either close your existing savings account or convert it into a Non-Resident Ordinary (NRO) savings account as soon as possible.

NRIs can buy both residential and commercial property in India but not agricultural land, farm houses, or plantation properties. However, if an NRI is willing to purchase agricultural land in India, it requires permission from the Reserve Bank of India for doing so.

A: Yes, an NRI can inherit any immovable property in India, be it residential, commercial, or agricultural, from a person resident in India or a person resident outside India. However, certain regulations and permissions apply.

NRIs need a PAN (permanent account number) Card because they will be expected to file income tax returns if they have rented out the property. Moreover, if the property is sold later, the capital gains arising from the sales would be subject to capital gains tax.