Yes, an NRI is free to buy and sell property in India, subject to certain conditions as per FEMA guidelines.
Yes, an NRI is free to gift properties to family or relatives. There is no concept of gift tax or inheritance tax in India.
You can execute a power of attorney on any person in India who can represent the sale on your behalf.
POA is a document executed by the seller of the property giving authority to any other person to execute the sale on his/her behalf.
The POA can be given to a family member or any other person.
The minimum price would be the Guidance Value. There is no restriction on the maximum; it’s based on what’s agreed with the buyer and seller.
It is the value listed in the sub-registrar records. This can be looked up by quoting the address and the most recent tax receipt of your property.
A sale agreement is drafted when the sale is agreed between the buyer and the seller and an advance is paid by the buyer. A sale deed is the document executed on the day of sale. It becomes the title deed of the new owner.
There is no legal restriction on the amount. The norm is usually 3% to 5% of the total sale consideration.
The buyer is required to deduct 20% + Surcharge + Cess, which would effectively come up to 23% to 24% of the total sale consideration.
You can get back the TDS once you pay the tax and file your income tax returns at the end of the year. Tax return filing is usually around June or July every year.
An application in Form 13 is made to the Income Tax authority along with a calculation of capital gain. If they find that the tax payable is significantly lower than the TDS, they might grant you a lower deduction certificate U/S Sec 197.
It takes roughly 3 to 4 weeks and regular follow-ups with the Income Tax Department.
It’s a 10-digit number issued by the Income Tax to the buyer. This allows the buyers to deduct and pay the TDS against the PAN number of the seller. The seller does not need a TAN.
TDS is usually paid a few days before the sale. TDS filing is done in the first week of the subsequent quarter in which the TDS payment is made. For example, if a TDS payment is made in April, TDS filing can only be done in the first week of July
TDS filing is the process of linking the tax deducted and paid by the buyer to the buyer’s PAN number. Without completing this process, the seller will not get back the TDS that was deducted and paid by the buyer.
It is a confirmation document issued by the buyer to the seller confirming that TDS has been paid and filed correctly.
The buyer and seller (or their powers of attorney) are physically present at the sub-registrar office on the day of sale for signatures, thumb impressions, and photographs which are affixed to the sale deed.
All expenses are usually borne by the buyer. Lawyer fees, stamp duty payment, and out-of-pocket expenses.
Sale consideration is received either on the day of sale or one day prior. It can be paid via bank transfer, cheque, or draft.
An application in Forms 15 CA CB is submitted to the bank along with a FEMA declaration, an LRS declaration, and a certificate issued by a practicing Chartered Accountant.
Long-term gains are taxed at 20%, and short-term gains are taxed at applicable slab rates.
Your property is considered “long-term” if you have held it for more than 36 months (3 years).
The purchase cost is indexed to the current date, which is known as the indexed cost of acquisition. The indexed cost of acquisition is subtracted from the actual sale value to arrive at a profit or a loss.
It is the inflation of the purchase cost to arrive at a value that takes into consideration the time value of money. The indexation points, which are used as a base, are notified and published by the Income tax Department every year. Indexation increases the cost of your asset so that the tax reduces.
There is no specified timeline, but you should receive it within 3 to 6 months after filing your income tax return. You can repatriate this refund using the same process as described above.