Interested! Let’s follow the journey to sell apartment in Gurgaon as NRI-The Ramesh Story
Today met my friend Ramesh who recently sold his apartment (also called a flat) in Gurgaon, India. It is an interesting narrative. Ramesh decided to sell apartment he owned back in India. He bought it for 60 Lakhs INR, and 1 CR is the selling price. He contacted a local real estate agent in Gurgaon and expressed his thought about selling his apartment. The real estate agent found a buyer for his apartment in weeks, and the deal is done over a zoom call. The buyer gives 50K INR as the token money. Following was the process followed to sell apartment after that:-
- Ramesh learned via google that since he is an NRI, his buyer has to submit 20% of the sale price(nearly 20 lakh) as tax to the Indian tax department (https://sbnri.com/blog/nri-income-tax/tax-slab-for-nris). Ramesh can then file an income tax return at the end of the year and may get the tax as a return.
- Ramesh contacts a chartered accountant in India and asks about the options about taxation to sell apartment as NRI. He came to know that he could file a tax document upfront with the Indian tax authorities and then his buyer has to file the actual capital tax interest (since he bought for 60 lakh and sold for one crore) on his behalf.
- Ramesh takes this path; the chartered accountant prepares all the tax documents and submits them to the Indian authorities. Ramesh has to wait for approvals from the Indian tax authorities. Based on the capital gains tax, his buyer will submit an actual amount to the Indian tax department.
- After waiting for four months, Ramesh finally gets the approval and then his buyer pays the capital gains tax on his behalf (which is much less than 20 lakhs since it is based on actual capital gains).
- Ramesh decides to fly to India and do the transfer of the property. Ramesh buys the ticket and reaches Gurgaon to sell apartment.
- He meets the real estate agent, the buyer, and the chartered accountant, and the transfer date is finally confirmed.
- Before the date of the transfer, the night before, he received another 4.5 lakhs, which was the balance of the deposit on the property sale.
- On the day of the property transfer, Ramesh reaches the transfer office, and the transfer is done to the new buyer. Ramesh gets a cheque/demand draft of the remaining amount.
- Ramesh deposits the cheque/demand draft into his NRO account.
- The chartered accountant prepares form 15 and other forms, utilising which the money is transferred from NRO to the NRE account. (https://www.exidelife.in/funds/knowledge-centre/blogs-and-articles/all-about-form-15ca-and-form-15cb)
- The chartered accountant also prepares the annual tax return for Indian tax authorities.
- Ramesh flies back to Australia.
- Ramesh now contacts his tax agent here in Australia and files a yearly tax return, and pays the remaining tax (if any) as per the guidance of the registered tax agent.
Hopefully you got the valuable information from Ramesh’s journey about how to sell apartment as NRI in India.
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