Factors that NRIs should take into account while selling property in India

economictimes.indiatimes.com:

real estate market has always attracted the investments from its diaspora spread across the globe. NRIs have readily contributed to the Indian real estate market by purchasing residential and commercial properties in the country. In the past few years, numerous investment opportunities are coming forth in the market that is centered to cater to the burgeoning investment needs of NRIs. Out of all, real estate investment in India is viewed as one of the most lucrative opportunities that increases the returns multi-fold and diversifies the portfolio. While purchasing property in India is an attractive proposition and a common investment option among the Indian diaspora, selling these assets isn't always straightforward. It calls for heightened understanding and thorough planning on the part of the NRIs, particularly concerning tax implications. Therefore, NRI sellers need to understand these intricacies to ensure full compliance and maximize profit.

NRIs have to pay taxes on the capital gains made from selling the property. Short-Term Capital Gain (STCG) tax rates are applicable if the property is sold within two years of its date of purchase and is estimated as per income tax slab rates of the NRI. Long- Term Capital Gain (LTCG) tax at the rate of 20% is applicable if the property is sold after two years. The Short Term Capital gain and Long-Term Capital gain can be calculated by simply using the formula: Short-term capital gain= Final Sale price- (Cost of acquisition +Home improvement cost+ Cost of transfer); and Long-Term Capital gain = Final Sale price- (Indexed cost of acquisition +Indexed cost of improvement+ Cost of transfer).Where:

Inoperative doesn't mean inactive: Tax