Under the provisions of Indian income tax laws, Non-Resident Indians (NRIs) are obligated to pay taxes on any income that is accrued or arises in India. If such income exceeds the basic exemption threshold, NRIs are required to pay tax according to the prevailing tax slab rates in India.
Capital Appreciation: Any profit from the sale of the property is subject to capital gains tax at the relevant rates. The rate applied depends on how long the asset was held before sale. If real estate is sold within 36 months of acquisition, the gains are considered short-term and taxed at the standard rates applicable to the NRI. Conversely, if the assets are held for longer than these periods, the gains are treated as long-term and taxed at a rate of 10%, regardless of the gain amount.
NRIs are encouraged to investigate the potential advantages available under the Double Taxation Avoidance Agreement (DTAA) between India and their country of tax residence. To avail of these benefits, they must provide a Tax Residency Certificate from their country of residence.
