Q692. Which country is UK NRI liable to pay LTCG on sale of Indian property
Question: Hi I live in UK and purchased a residential plot in India 1993 and sold in march 2014. I understand that I am liable to pay LTCG tax. In which country I am liable to pay LTCG tax. UK or India? If I invest in section 54 Bonds to get exemption from LTCG tax in India, Will I still be liable to pay CGT in UK? Regards Raj Answer: Since you live in UK, I assume you are a resident there. UK residents are liable to pay Capital Gains Tax on gains that are made in UK as well as abroad. The Double Taxation Avoidance Agreement (DTAA) between India and UK would give you relief by giving you credit for taxes paid in India. However! in the event you decide to invest in tax saving instruments to save capital gains tax in India, keep in mind that such tax saving opportunities allowed in India cannot automatically be extended to foreign countries. Speak with a tax consultant in UK to get clarification.Capital Gains Tax Relief in Foreign Countries
Most foreign countries provide some sort of relief/exemption from capital gains tax on property. However, such saving opportunities are normally allowed only on the sale of a primary residence. For foreign residents, it would be difficult to claim a residence in India as their primary residence.NRIs claiming exemption under section 54/54F/54EC.
NRIs who are taxable on Indian Capital gains in their country of residence, before considering investments to save capital gains tax in India should calculate their tax liability scenario with the help of a chartered accountant or tax professional taking the DTAA into account. This will let them know before hand whether claiming tax exemption in India for the entire or partial capital gain is beneficial for them.
Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional
accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been
stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail.
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Q692. Which country is UK NRI
liable to pay LTCG on sale of Indian
property
Question: Hi I live in UK and purchased a residential plot in India 1993 and sold in march 2014. I understand that I am liable to pay LTCG tax. In which country I am liable to pay LTCG tax. UK or India? If I invest in section 54 Bonds to get exemption from LTCG tax in India, Will I still be liable to pay CGT in UK? Regards Raj Answer: Since you live in UK, I assume you are a resident there. UK residents are liable to pay Capital Gains Tax on gains that are made in UK as well as abroad. The Double Taxation Avoidance Agreement (DTAA) between India and UK would give you relief by giving you credit for taxes paid in India. However! in the event you decide to invest in tax saving instruments to save capital gains tax in India, keep in mind that such tax saving opportunities allowed in India cannot automatically be extended to foreign countries. Speak with a tax consultant in UK to get clarification.Capital Gains Tax Relief in Foreign Countries
Most foreign countries provide some sort of relief/exemption from capital gains tax on property. However, such saving opportunities are normally allowed only on the sale of a primary residence. For foreign residents, it would be difficult to claim a residence in India as their primary residence.NRIs claiming exemption under section 54/54F/54EC.
NRIs who are taxable on Indian Capital gains in their country of residence, before considering investments to save capital gains tax in India should calculate their tax liability scenario with the help of a chartered accountant or tax professional taking the DTAA into account. This will let them know before hand whether claiming tax exemption in India for the entire or partial capital gain is beneficial for them.
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RI Information
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educating and connecting Indians across the globe
© Copyright 2006 Nriinformation.com
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