Rishab (A.C.A.) (155 Points)
08 September 2010An NRI has Income in India only from: 1) House Property. and 2) Other Sources and has some accumulated losses of earlier years, which are being adjusted from the current HP Income.
Now the NRI has sold the property, after applying Indexation benefit there is some Capital Gains.
1) Can we take Cost Indexation Benefit?
2) Can benefit u/s 54 be availed to save the Capital Gains Tax?
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 08 September 2010
HI RISHAB,
FOR INDEXATION BENEFIT NO DISTINCTION HAS BEEN MADE FOR RESIDENT ASSESSEE AND NRI ASSESSEE. THUS, INDEXATION BENEFIT IS AVAILABLE FOR RESIDENT (ROR/RNOR) AND NON RESIDENT.
FURTHER, IN CASE OF SEC 54 ALSO, NO DISTINCTION HAS BEEN MADE FOR RESIDENT ASSESSEE AND NRI ASSESSEE, PROVIDED THIS DEDUCTION IS AVAILABLE FOR INDIVIDUAL AND HUF. THUS, U CAN CLAIM THE EXEMPTION UNDER SECTION 54.
REGARDS,
MANOJ
Rishab
(A.C.A.)
(155 Points)
Replied 09 September 2010
My confusion arised after reading Second proviso to Section 48 (read with Section 115D)
WHERE it says that CAPITAL gain arises to a non-resident from the transfer of a long-term capital asset, other than capital gain arising from the transfer of shares in, or debentures of, an Indian company, the benefit of indexation will not be available to the non-resident.
Please advise!
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 10 September 2010
Dear Rishab,
The benefit of indexation is not available to NR only in case of sale of shares. This has been explained in 115D. 115D must be linked with 115C. If u make a combined reading of the above said sections, u will come to know that indexation is not available for sale of shares
CAclubindia
