Q.769 No capital gains tax on

Inherited property in India . . .

Question: Hello Namaskar, I am NRI in usa with standard passport. I have my parental property in India that I want to sell. My intention is to sell it via check or bank draft. What taxes do I have to pay in India? When I transfer money to usa, what kind of taxes do I have to pay in usa. Total value of the property is about $100,000us I will appreciate if you can advise. Best regards Dinesh Subherwal Answer: There is no capital gains tax payable in India on inherited property until such property is sold and a capital gain does take place. In order to calculate capital gains when inherited property in India is sold. The previous owner's (the person from whom property is inherited) cost and date of acquisition is taken into account for indexing purposes to calculate capital gains. Capital gains tax generally works out to 20.6% Funds received as part of inheritance are generally not considered as income in USA and not taxed. However, for amounts over US$ 100,000 there is a requirement to notify the IRS through Form 3520. This is only to comply with the law and no tax is payable. Kindly note that while inheritance may not be taxable in USA, any capital gain on the sale of inherited property may become taxable. I am not sure what you mean by being an NRI in USA with a standard passport! do you hold an Indian or USA passport? Your accountant should be able to clarify any questions you may have regarding US taxation on inherited property. The IRS also has an excellent website with extensive information. Here is the link: http://www.irs.gov/