Early tax planning and proper documentation can help non-resident Indians reduce tax liabilities and avoid compliance issues
Non-Resident Indians (NRIs) planning to sell property, shares, gold or other capital assets in India are being advised to assess their tax liabilities well before completing a transaction, as careful planning can help reduce the overall tax burden and prevent unnecessary deductions.
Tax experts say the capital gains tax applicable to NRIs depends on the type of asset, the holding period and the prevailing provisions under the Income Tax Act. Different rules apply to residential property, listed and unlisted shares, gold and agricultural land, making advance planning essential.
For property transactions, maintaining complete purchase records, improvement costs and other supporting documents is important for accurately calculating capital gains. Experts also recommend exploring exemptions available under provisions such as Sections 54, 54F and 54EC, which allow eligible taxpayers to reduce or defer tax by reinvesting the gains in specified assets or residential property within prescribed timelines.
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NRIs selling listed shares or equity-oriented mutual funds should understand the tax treatment applicable to such securities, while those disposing of unlisted shares should note that gains are calculated without considering currency fluctuations
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In the case of gold or jewellery, proof of ownership and acquisition dates is crucial for determining the correct tax liability
Experts also caution that agricultural land may not always attract capital gains tax, depending on whether it qualifies as a capital asset under the law. Therefore, sellers should verify the tax status of such land before entering into a transaction.
With recent changes to India’s capital gains tax regime continuing to influence investment decisions, professionals recommend that NRIs review the applicable rules, maintain accurate records and seek qualified tax advice before finalising any sale. Proper compliance can help minimise disputes, avoid excess tax deductions and ensure smoother filing of income tax returns in India.
