Process to Carry capital gains from India

This query is : Resolved

Hariharan (Querist)
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04 December 2007 Hi,

One of my friend stays and has settled down in USA. He has a property in New Delhi and he wants to dispose it off and after paying the required taxes wants to take/have that money in USA.

Can you pls advise on the requirements to be followed as per the IT Act to legally do the above transaction.

Thanks
Hari

R.V.RAO

R.V.RAO (Expert)
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04 December 2007
I REPRODUCE BELOW details of repatriation by NRIs FROM a very useful website
www.nritaxservices.com

A. Immovable Property

The sale proceeds of the property is permitted for repatriation as under:

I. Without RBI permission

A. Property held for more than 10 years: NRIs/PIOs are allowed to repatriate the funds held in their NRO A/c up to US$ 100,000 per calendar year being sale proceeds of immovable property held by them for period of not less than 10 years subject to payment of taxes. This has been enhanced to an overall limit (including remittances of proceeds of inherited assets, remittance for education and medical purposes) of US$ 1 million, which is effective from 13 January 2003 subject to further review by RBI.

2B. Other Properties:

a) The property was acquired by the seller in accordance with the provisions of foreign exchange law in force at the time of acquisition.

b) It is sold after 3 years of date of Purchase Deed or final payment of Purchase consideration which ever is later. However, the above lock in period of 3 years is not applicable in case of such property sold by NRI/PIO on or after 19.08.2002

c) Only up to the value of Purchase consideration paid in Foreign Exchange.

II. With RBI permission

In case of a non-resident who had acquired immovable property in India, and who is not eligible under I above, sale proceeds of such immovable property can be repatriated by obtaining special permission of the Reserve Bank of India on the ground of hardship.

3. Legacy, Bequest, Inheritance

The sale proceeds/realisation of assets is permitted for repatriation as under:

a) Without RBI Permission
NRIs/PIOs will be able to remit up to US$100000 per calendar year out of the assets in India acquired by them by way of inheritance/legacies. This has been enhanced to an overall limit (including remittances of proceeds of immovable property held for more than 10 years, remittance for education and medical purposes) of US$ 1 million , which is effective from 13 January 2003 subject to further review by RBI.

b) With RBI permission
Until further information on the above(a) and for any other assets, repatriation is allowed only after obtaining special permission of the Reserve Bank India on the ground of hardship etc. and subject to conditions as specified in the permission.

4. OTHER ASSETS(Without repatriation Rights)

The sale proceeds/realisation of assets is permitted for repatriation as under:

- Deposits with Banks/Firms/Cos.
- P.F/Super Annuation Balance
- Life Insurance Maturity proceeds/claims
- Sale proceeds of Shares, Securities,
- Any other assets/Immovable Property

Repatriation is permitted (Net of Tax) only by obtaining special permission of the Reserve Bank India on the ground of hardship etc. and subject to conditions as specified in the permission.

The procedure for repatriation of Income/Assets shall be provided at request by
WWW.nritaxservices.com

DETAILS OF NRI CAPITAL GAINS AND EXEMPTIOS ARE ALSO PRIVIDED BY THE SAME WEBSITE ,PARTLY GIVEN BELOW. FOR ELABORATE DETAILS, PL. VISIT THE WEBSITE.

short term cap. asset: Capital Assets like, immovable property, Jewellery etc If held for period not exceeding 36 months from the date of acquisition
Capital asset which is not a short –term capital asset is long term Capital Asset.

rate of tax on long term capital gains on immov.poperty is 22.66%.

CAPITAL GAINS TAX EXEMPTIONS ON REINVESTMENT

NRIs are entitled to claim exemption from the tax if they reinvest long term capital gains /net sale consideration into A RESIDNTAIAL HOUSE OR THE following BONDS.

ALL LONG TERM CAPITAL ASSET TAX SAVING BONDS issued by
a. National Highways Authority of India

b. Rural Electrification Corporation Ltd ( REC)
1) Investment is to be made within Six months from the date of transfer of asset.

2) New asset is to be held for a period of 3 years.

3.Amount equivalent to Capital Gains or Rs. 50 lakhs whichever is less MUST BE INVESTED IN THESE BONDS.
There are many conditions, which shall be provided at request BY www.nritaxservices.com.
WHAT IS GIVEN ABOVE IS ONLY A SHORT SUMMARY. FOR FULL DETAILS,PL. VISIT THEWEBSITE STATED ABOVE.
R.V.RAO