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Process of NRI selling property in India

Selling property in India as a Non-Resident Indian (NRI) involves several steps and considerations. Here’s an overview of the process:

Eligibility: Make sure you qualify as an NRI under the Indian Income Tax Act. Generally, an individual who has stayed in India for less than 182 days in the financial year is considered an NRI.

Property Evaluation: Determine the current market value of your property. You may want to get a professional property valuation done to ensure you’re pricing it correctly.

Tax Implications: Understand the tax implications of selling property in India. Capital gains tax will be applicable, and the rates vary based on the duration of ownership (short-term or long-term) and other factors. It’s advisable to consult a tax expert to understand your tax liabilities.

Obtain Necessary Documents: Gather all relevant documents related to the property, such as the sale deed, title deed, possession certificate, tax receipts, etc. These documents will be required during the sale process.

No Objection Certificate (NOC): If the property is situated in a housing society, apartment complex, or gated community, you might need to obtain a No Objection Certificate from the housing society’s management.

Clear Outstanding Dues: Ensure that all outstanding dues related to the property, such as property tax, maintenance charges, etc., are cleared before the sale.

Capital Gains Account Scheme (CGAS): If you plan to use the sale proceeds to buy another property and save on capital gains tax, you can deposit the proceeds in a Capital Gains Account Scheme before the due date for filing taxes.

Power of Attorney: If you can’t be physically present in India during the sale process, you can grant a Power of Attorney (PoA) to someone you trust to act on your behalf.

Sale Agreement: Draft a sale agreement that outlines the terms and conditions of the sale. This agreement is typically prepared by a lawyer and is signed by both the buyer and the seller.

Stamp Duty and Registration: Pay the applicable stamp duty and get the sale agreement registered at the local sub-registrar office. This step legally transfers the property to the buyer.

Bank Account: If you don’t already have an NRI bank account, open one to facilitate the transaction and to receive the sale proceeds.

Tax Deduction at Source (TDS): The buyer is required to deduct TDS on the sale amount and deposit it with the Income Tax Department. You will need to provide the necessary documents to the buyer for this purpose. For NRI’s there will be a deduction of 23.92% unless there is a lower TDS certificate issued by way of form 13

Repatriation of Funds: If you want to repatriate the sale proceeds abroad, you’ll need to follow the guidelines set by the Reserve Bank of India (RBI). Certain documents, including a certificate from a chartered accountant, might be required. One need to obtain 15CA 15CB certificate from a Chartered accountant

File Income Tax Return: You’ll need to file your income tax return in India for the financial year in which the property was sold, even if you don’t have any other income in India.

It’s important to note that the exact process and requirements may vary based on the specific type of property sale. It’s recommended to consult a legal and tax expert to ensure that you’re following the correct procedures and fulfilling all obligations.

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