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Capital Gains

What we Offer? We offer an umbrella of Services with respect to Capital Gains:
  • Advice on Taxes arising at the time of sale
  • Lower Tax Deduction Certificate
  • Computation of Capital Gains arising in India
  • Tax Planning advice
  • Filing of Tax Returns in India
  • CA certificate for Repatriation of funds to Australia
  • Assistance in process of Repatriation of funds to Australia
  • Provision of certificate of Taxes paid in India in order to facilitate Foreign Tax Credit in Australia

Scenario 1

Mr Rahul, an Australian Resident has purchased a Building in India in the year 1983 for Rs 50,000. In the year 2014, he wanted to sell the Building in India for a Sale Consideration of Rs 75,00,000 and wants to repatriate the amount to Australia. The procedure Mr Rahul has to follow is as below:

Pre-Sale Procedures

Advice on Taxes arising at the time of sale

If the payment is made to a Non-Resident, the Section 195 will be attracted and the buyer is supposed to deduct TDS @ 20% plus EC & SHEC on the sale consideration. Surcharge at 10% will be applicable if the amount paid exceeds Rs 1crore.

Lower Tax Deduction Certificate

Lower tax deduction certificate is applicable when an assessee can assess his future taxes and determine that the actual taxes are lesser than the tax that is being deducted at source.

Suppose, Mr. Rahul does not have any other sources of income in India and he wants to reinvest a portion in India and take back the remaining. Mr. Rahul can avail Lower TDS Certificate from Income tax Department if his actual tax liability is lower than before.

Following details to be furnished while applying for lower TDS certificate under section 197 or under section 206C (9) of the Income tax Act 1961.

Lower TDS Certificate for Non Resident:
  • PAN of the Applicant
  • Passport (Overseas Indian Certificate)
  • Date on Which he was in India for past 10 Years
  • Date of his arrival and departure during past 10 Years
  • Sources of income from which the payment has been done during purchase of property proposed to sell
  • Income tax return for last three years
  • Details of bank account in India (Saving Bank, Fixed Deposit, Bonds, NRE/NRI Accounts)
  • Sources of any other income including rental income from the property for the past years
  • Affidavit of declaration in Prescribed format
  • Affidavit Form No 13
  • Agreement to Sell for Sale of Property
  • Computation of income and capital gain and tax thereon (Projected)
  • TAN and PAN of the deductor/Buyer
  • If any cost of improvement incurred by the seller then with Proof
  • Interest Certificate for Previous Year
  • Loan Statement
  • Self declaration letter for outstanding Demand of Income tax
  • Power of Attorney
  • Correct Calculation of Tax paid and copy of 26AS for the proof of computation.

Post-Sale Procedures

Computation of Capital Gains arising in India Long Term Capital Gains

Gross amount received on sale of immovable property

Cost Of Acqusition

Value as at 01/04/1983 as per valuation report

Indexed cost of acquisition:1024/116 x Rs. 150000 1324138
Capital Gains- Long term
Capital Gains- Long term



Filing of Tax Returns in India

Every Individual being a Resident Indian or deriving any income with respect to any connection In India is liable to file returns in India.

In case of Mr.Rahul, if the Tax liability is much lower than the Tax deducted at source, it becomes very much necessary to file Returns in India and claim the tax as Refund.

CA certificate for Repatriation of funds to Australia

Mr.Rahul needs to repatriate the amount to Australia. This process involves the Bank in India where the amount is currently lying in and also a certificate from a Chartered Accountant 15CB and 15CA to initiate the process.

Once the certificates are provided to the Bank, the bank will be able to transfer the amount.