448. Sell inherited property in India

and Transfer money to Australian

Bank Account

Questions: Hi My father died few years ago. We are 4 brothers and sisters. All married with children. I left india in 1984 with my family. I am residing in Australia. I need to know: 1. How I can transfer my money(after selling this inherited property)? 2. What precautions should I take when I sell the property? 3. Do I have to pay any TAX in India on the sale of my share> If YES- how much? 4. I have NRI City bank account in Delhi. 5. Can I transfer the sale in Dollars to Australian Bank account. Regards RANI Answer: Regards to your questions: 1. Money received from the sale of inherited property in India can be transfered abroad legally. Up to one million dollars per year is permitted. More information on this is available on this website on a page titled ‘REPATRIATION OF SALE PROCEEDS OF PROPERTY SOLD IN INDIA’ you can view this page by Clicking HERE 2. Regards to your questions number 2 and 3, when a property is inherited by someone, no capital gains tax applies. However, when inherited property is sold, capital gains tax comes into play and has to be paid. Capital gains tax is calculated applying indexing. In case of inheritance the purchase price that your father paid for the property will be used in your case, less any cost of improvements etc when calculating capital gain tax. To find out how to calculate capital gains on property sold in India see answer to question number 211 where step by step instructions are given. As for what precautions you should take when selling the property, if you are the only owner, the transaction would be straight forward and you can sell the property without any problems provided you accept payment through legal banking channels. On the other hand, if you own the inherited property jointly with other brothers and sisters, you may have to discuss the sale and how you would get your share, with your family members. Normally where property is jointly inherited: o If all parties agree to sell, the property can be sold, capital gains taxes applicable can be paid and the money from the sale can then be divided amongst the legal owners of the property sold. o If you are the only member of the family settled abroad, your siblings may decide not to sell the property, in such cases, they can pay you for your share of the property. In other words, they buy your share of the property. How all this effects your situation would depend on your relationship with your siblings. You may wish to consider legal help to protect your interest in the inherited property. 3. The money you receive from the sale of the property can be deposited in the NRI account you have in Delhi and then remitted to Australia in Australian dollars. Your bank should be able to guide you with this transaction. General Note: Indian residents sending money abroad from India As per RBI: ‘Any resident individual, if he so desires, may remit the entire limit of USD 200,000 in one financial year under LRS as gift to a person residing outside India or as donation to a charitable/educational/ religious/cultural organization outside India. Remittances exceeding the limit of USD 200,000 will require prior permission from the Reserve Bank.’ *LRS refers to Liberalized Remittance Scheme