215. Least expensive way to

transfer property in India

Question: Both my son and myself are NRIs, UK citizens and residing in Uk. I would be very grateful to you if you would answer my following two questions. 1. What would be least expensive in terms of Indian taxes and stamp duty between gifting my immovable property in India and passing him on under will? 2. If, I was to sell my property, what amount of money I could officially bring back to UK-is it the amount I paid on purchase or the amount realised on sale? SATYAVEM JAYATE Answer: No inheritance or gift tax is levied in India. Whenever a document is registered, stamp duty has to be paid. When it comes to acquiring property by way of inheritance or gift the stamp duties in most states in India are considerably lower. The least expensive would be to give your son a power of attorney to do what he wants with the property on your behalf. Here there is hardly any cost other than the power of attorney attestation fee of £8.00 charged by the Indian consulate in UK. If and when your son decides to sell the property, the price you paid will become the acquisition price when capital gains are calculated. Regarding your question on repatriation. If the property was acquired out of foreign exchange sources via normal banking channels or debit to NRE account, The amount you originally paid for the property could be repatriated immediately. In such a scenario you could deposit the balance from the sale of your property into an NRO account. You may then be able to repatriate up to US$ one million per financial year from this account, provided you get a certificate from a chartered accountant that all applicable taxes have been paid. There is a prescribe form by CBDT for this purpose and your accountant should use this to issue the certificate. If you plan on bringing the sale proceeds from your property in India to UK, make sure you do not accept any cash payments that are usually made by property purchasers under the table. Insist on all money being paid through legal banking channels only.