Realty check: How NRIs can minimise complexities in selling property in India
For non-resident Indians (NRIs), managing real estate in India can be a maze of unexpected challenges and hidden tax complexities. Imagine selling your property in India, only to realise that a hefty 20% tax is deducted at source, and the key to reducing this tax burden lies in past tax returns, you never knew you were required to file.
This oversight is common among NRIs, and can turn what should be a straightforward transaction into a bureaucratic nightmare. “Not voluntarily filing ITRs is a mistake many NRIs make, especially those who own properties in India," said Urvil Modi, founder and chief executive, Samriddhi Wealth Management, a Sebi-registered investment advisor.
«The assessment officer (AO) relies on past ITRs to evaluate income and decide the TDS rate. I strongly advise NRIs who have a property in India to voluntarily file ITRs even if they don’t have an income (in India) just to maintain the records,» he added.
Without these records, your chances of reducing the TDS rate diminishes, leaving you with significant capital tied up for almost a year until the refund is processed.
The complications don’t end there. NRIs often struggle to find buyers willing to pay through bank transfers, with cash transactions being prevalent in the Indian real estate sector. Ajay R. Vaswani, founder of Aras and Co. Chartered Accountants, said this can force NRIs to sell at below-market prices.
“Cash in real estate transactions is quite prevalent but an NRI can’t use the cash. For this reason, in many cases, they end up selling the property at a lower price than the market value as finding a buyer becomes difficult," he added.
Navigating the tax implications, securing the necessary certificates, and ensuring compliance with
Read more on livemint.com
