Selling a property in India can be a hassle-free process if you are an NRI (Non-Resident Indian) and you follow a few simple checklists. Here are the five checklists that you should keep in mind while selling your property in India:
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Checklist #1: Transfer your PAN
The first step you need to take is to transfer your PAN (Permanent Account Number) from local jurisdiction to international jurisdiction. If you do not file your return or file it from a local jurisdiction, your PAN will stay in the local jurisdiction. Without transferring your PAN to the international jurisdiction, you cannot apply for a lower TDS certificate. So, before you even think about selling your property, check the jurisdiction of your PAN and transfer it if required.
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Checklist #2: Gather your documents
The second step is to gather all the required documents for applying for a lower TDS certificate. As an NRI, if you sell your property in India, there is a TDS tax deduction of 22.88%, which is approximately 23%. To avoid paying such a huge TDS and then claiming a refund, you can apply for a lower TDS certificate. For this, the Income Tax Department requires certain documentation such as purchase property documents, capital gain calculation, PAN, TAN, and BIAN numbers. Collecting these documents beforehand will save you a lot of time once you find a buyer.
Checklist #3: File Form 13
Once you have gathered all the necessary documents, you need to file Form 13 online to get a lower TDS certificate. This certificate will help you avoid paying the 23% TDS and make the selling process hassle-free. With Form 13, you will have to provide your buyer’s TAN number, which they should register beforehand. The online application will be sent to the Income Tax Officer in your international jurisdiction, and they will process the application within 30 days. This step will help you determine the exact amount of TDS that you need to pay.
Checklist #4: Follow up
Once you have submitted your Form 13, you will receive an acknowledgment number, and you need to follow up with the assessing officer who is processing your lower TDS or nil TDS application. You need to be polite but consistent with your follow-up to ensure that the process moves smoothly. Once you receive Form 13, you need to give it to your buyer, and they will submit it to their bank for the loan disbursal process.
Checklist #5: Capital Gains Tax
Finally, you need to calculate and pay the capital gains tax on the sale of your property in India. This tax is calculated based on the difference between the purchase price and the selling price of the property. You can use the documents gathered in Step 2 to calculate your capital gains tax.
In conclusion, selling your property in India as an NRI can be a hassle-free process if you follow these five checklists. By transferring your PAN, gathering your documents, filing Form 13, following up, and paying the capital gains tax, you can sell your property without any complications.