Capital Gains Tax in India for NRI?

Question

Hi!
I am resident of UK, recently got British citizenship. 3 years ago i bought land in India as an investment. I want to sell the land in India and take the money back to UK to buy a property in UK.
The tax consultant has told me that i will have to pay the capital gains tax in UK on any profit made from the sale. The land is in joint name and as per UK law one person will pay 28% tax( high income earner) and another 18% ( low income earner).
What i am not clear is whether i will have to pay any Tax in India also, as i am paying tax in UK?. I read about double taxation treaty that India has with UK. What i understood is that i only need to pay tax one country most probably the country of residence, is that correct?.

Answer 1

As per the IT Act, 1961a NRI has to pay tax on income incurred in India.



Since the sale of land will result in LTCGs in India, you have to pay tax in India only.



HMT

Answer 2

1) Yes you will have to pay capital gains: either short-term or long-term after indexation.

2) Foreign citizens are (legaly) not allowed to own land in India. However PIOs are allowed to own.(you must have PIO card)

3) Double taxation avoidance agreement has interpretation issues. Whether it is country of residence or is it country of income? This means tax authorities interpret it in their favour. Usually all income generated in Inida is taxed in India. Thus it becomes a question of LAW. Which can be settled only in court. (the recent telephone company case where the buyer was charged with capital gains)

4) You can pay tax in India and claim tax exemption in UK.

Answer 3

a million. you will incur LTCGs on which you will desire to pay tax @ 20% given which you do no longer avail exemption united states54F. yet on the grounds which you should purchase a residential flat out of the proceeds, you would be exempted from tax. 2. Deposit all funds in one a/c. point out this in time table AIR of the ITR. you are able to desire to preserve all documentary evidences with you, additionally concerning source of earnings. 3. document ITR once you incur LTCGs. HMT

Answer 4

You can visit the following site www.incometaxindia.gov.in

were you can find information about NRI taxation.

Advocate,Chennai