Property tax is the annual tax paid by a landlord to the municipal corporation of his region or the local government. The property takes account of all tangible real estate property including his home, place of work and the property he has leased out to renters.
For both kinds of capital gains, there are following TDS rates applicable for both long term and short term gains. A total of 20% TDS is applicable for a property held for more than 2-3 years (long term capital gains) while TDS is calculated as per income rate slabs of the seller if a property is being held for a less of 2 years.
You can check out current TDS rates for the long term and short term capital gains effective from
|Particulars||Less Than 50 Lacs||50 Lacs to 1 Crore||More than 1 Crore|
|Long Term Capital Gain Taxes||20%||20%||20%|
|Surcharge||Nil||10% of above||15% of above|
|Total Tax (Inclusive Surcharge)||20%||22%||23%|
|Health and Education Cess||4% of above||4% of above||4% of above|
|Total TDS(including Surcharge & Cess)||20.8%||22.88%||23.92%|
|Particulars||Rs. 2 Crore to 5 Crore||Above 5 Crore|
|Long Term Capital Gains||20%||20%|
|Surcharge||25% of Above||37% of Above|
|Total Tax (including Surcharge)||25%||27.40%|
|Health and Ed||4% of Above||4% of Above|
|Applicable Total TDS Rate||26%||28.496%|
Today Nri people tend to sell their property acquired in India when they get citizenship in a foreign country. One thing becomes very essential for them is the sale of house land and related property tax filing proceedings. As most of them don’t like to give a burden of property taxation on their relatives, closures, family members- In such cases they manage all tax implications applied on selling or buying a property. Because most of them don’t have such rental income related income plan from such property resources inherited from their ancestors in India. Consequently, each of them decides to sell to others for taking a new step for investments.
In India, the municipal corporation of a specific region evaluates and imposes the property tax once a year or semi-annually. The property tax amount is based on the area, building, property size, and so forth. The collected tax amount is principally used for public services like restoring roads, building schools, public buildings, and sanitation.
There is a bit of confusion in payable tax amount for NRIs owning their property in India. If they want to sell it a person, there are certain tax assets which are required to be followed according to a central government. We will remove every confusion in a while determining total TDS applicable, Capital Gain Tax deductions and exemptions. NRI Property tax in India is a must for NRIs who want to sell the property either to a resident or non-resident Indian. The tax that would payable would be dependable on the type of the gain whether it is short term or long term. Each such condition each purchaser or seller must need to update about income tax regulations act related to capital gain taxes and related exemptions norms. For example- if an NRI sells a house after 3 years incurring capital gains and makes an investment within 6 months then he/she is liable to exempt the capital gain taxes.
When a property is sold after 2 years of purchasing(reduced from 3 years to years in budget 2017) then long term tax would be applied otherwise it exists under short term gain tax. So this article gives the proper way to file tax amount in India. Also, NRI might file tax even if the property is inherited. One thing to be noted here is which date transfer that one to his/her account.
The profit you make from selling such land or house will be added in your total income and could be treated as taxable according to different income tax slabs you fall under. Check out table representing such income tax slabs in India.
Types of lands which fall under Property Tax: In India, Property Tax is levied to the real estate property including land, buildings, flats etc. Check out all properties which are levied to tax under India Income tax laws.
Non-Resident Indian pay the tax only on Income earned from Indian property, land, agriculture or houses. The tax year in India starts from 1st April 2019 and ends at 31 March 2020. So today we will discuss each type of tax levied on NRIs.
NRIWAY’s Property Tax Management service is a complete solution to provide property tax management. We concentrate on delivering personalized services intended to solve the property tax issues all over the country.
Income Tax Rate For Men (below the age of 60) & HUF
Income Tax Rate For Women (below the age of 60)
x< 2.5 Lakh
10% of the amount that exceeds Rs. 2.5 lakh
10% of x that exceeds Rs. 2.5 lakh
20% of the amount that exceeds Rs. 5 lakh
20% of the x that exceeds Rs. 5 lakh
30% of the amount that exceeds Rs. 10 lakh
30% of the amount that exceeds Rs. 10 lakh
NRIWAY’s Property Tax Management service is adaptable based on your particular conditions and incorporates:
Property Tax Bill Collection
Property Tax Planning and Research
Property Tax Bill Payment
Property Tax Compliance
We also offer real-time access to your property tax information by means of our property tax management services in India. It takes account of reporting features that can be personalized as required. Allow our group of proficient property tax experts’ partner with you to alleviate your tax management burden.
Education Cess: An education cess of 3% is levied on the total income tax liability.
Rental Income Tax: Income earned from leasing properties, land, buildings in India is subject to 15% of taxation, levied on gross rent collected.
Wealth Tax: Net wealth tax is levied at 1% on a taxpayer´s net assets if it exceeds INR3 million (US$44,118).
How to pay Property Tax: In India, Municipal taxes must be file online either on state government or municipal authority portals. These areas of paying tax online have eliminated the cumbersome process of tax payment. A 'Khata Number' or 'Property Tax Number' is associated with each property to be identified uniquely. A property tax payment can be attempted via offline channel by visiting Municipal corporation offices or to the banks partnered with those municipal authorities as well.
Different municipals incorporate separate systems for tax payment and assess the due tax.
Capital value = Market value of property x total carpet area x weight for construction type x weight for age of a building.
Property tax = Capital value of property (X) current property tax (X) weight for user category
If the property tax department accepts your appropriately completed return in addition to all the correct and complete enclosures as it should be, you can look forward to getting your property tax refund: by mid-August if you are a resident or mobile home holder, and your file property tax refund by June 15, or within 60 days after you file the refund, whichever is later.
In order to save capital gain taxes by an NRI, he can reinvest again after buying a new property. NRI can apply for a tax exemption certificate from Income Tax Dept. under section 195 of Income Tax Act, 1961. Under three conditions you may claim TDS refund to lower its total value.
In order to minimize the TDS after buying a property from NRI one must understand below three points:
2. If your country of residence has agreed upon Double Taxation Avoidance Agreements (DTAA) with the Indian government then DTAA helps a tax payer for freeing his tax amount in both countries. NRI need to submit a tax residency certification from the country of his residence.
3. You can either buy another house in India or invest in capital gains bonds u/c 54EC. You should submit an affidavit stating that you will invest the capital gain amount in capital gain bonds.
According to the Indian Income Tax Act, every time a resident buys any property from a non-resident, he has to subtract income tax (TDS) and shell out the balance amount to the property vendor.
He has to subtract 20% of the sale consideration as the tax before making the net compensation to the broker.
Initially, property purchaser is supposed to obtain TAN under section 203A of the Income Tax Act, 1961 before taking away TDS. TAN can be acquired by applying to fill up the Form 49B.
TDS must be taken away at the time of paying the sum to the NRI. The info about the TDS being subtracted and the rate at which it was deducted must be cited in the sale deed between the NRI property seller and the property buyer.
The TDS deducted by the property purchaser must be deposited via Form number or challan for TDS payment. It has to be done on or before the 7th of the following month in which the TDS is deducted.
You can deposit the TDS through banks that are certified by the government of India or the Income Tax Department to round up Direct Taxes. The total deposit has to be made by the property buyer.
When NRI possesses the property in India, the tax implications, as well as an exemption, are identical to those of a resident Indian. On the other hand, the NRI must turn out all the papers for asserting deductions. An NRI is required to make an up to date decision to avail all the benefits accessible to NRIs.
After the NRI gets hold of a piece of immovable property, following tax provisions would be applicable for an NRI to be aware of the taxability of income earned from such investments.
Mostly used for salary earnings, other source earnings, house property earnings that are up to Rupees 50 Lakhs – just for Individual Resident Assessees.
It is again for salary income, other source earnings that go over Rupees 50 Lakhs, house property revenue (for more than one house) in addition to capital gains and Individual Resident or Non- Resident Assessees in addition to HUF Assessees.
Business or profession income in addition to any other earnings like salary income, other income sources, capital gains, and house property is a necessity for filling this form.
No matter if you are NRI or not, every person has got to file a Property Tax Return.
For the most part, ITR -1 is used for salary income, other source earnings, house property income that’s up to Rupees 50 Lakhs for resident assessees.
You can apply for Lower Tax Deduction or Nil Tax Deduction with Income Tax Assessing Office as NRI Seller. In case, you are planning to re-invest capital gain then you can apply for tax exemption certificate as well. In consonance with an assessment by Income Tax Department, an official document will be issued to non Resident Indian seller for a property deal.
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