📢 New Tax Rule for NRIs Selling Property in India – No More Indexation from July 23, 2024!

If you're a Non-Resident Indian (NRI) planning to sell property in India, a significant change in taxation is about to impact your capital gains calculations.

📌 What's Changing?

Under the recent Union Budget, the Government of India has proposed a flat 12.5% tax rate on long-term capital gains (LTCG) arising from the sale of immovable property (i.e., land or building) by NRIs. But here's the catch:

📅 Effective Date: Transfers made on or after July 23, 2024

🔍 Previous Rule (Before July 23, 2024)

For immovable property acquired and sold by NRIs before this date, the taxation options were:

• Option 1: 20% LTCG tax with indexation benefit
  
  

• Option 2: 12.5% tax rate without indexation
  
  

Indexation allowed NRIs to adjust the purchase price for inflation using the Cost Inflation Index (CII), significantly reducing the taxable capital gain.

⚠️ New Rule (On or After July 23, 2024)

• Flat LTCG Tax Rate: 12.5%
  
  

• Indexation Benefit: ❌ Not allowed
  
  

This means NRIs selling property after this date cannot claim inflation-adjusted cost and will be taxed at a fixed rate on the full gain amount.

💡 Example

Suppose an NRI bought a flat in 2010 for ₹50 lakhs and sells it in August 2024 for ₹1.5 crore.

• Under the old regime (with indexation), the taxable gain could be reduced substantially by adjusting the cost to, say, ₹90 lakhs (inflation-adjusted), resulting in ₹60 lakhs of taxable gain.
  
  

• Under the new rule, no indexation is allowed. The entire ₹1 crore profit is taxable at 12.5%, resulting in a higher tax outgo.
  
  

👇 Key Takeaways

✅ Plan your sale date carefully if you're an NRI property owner.
✅ Consider selling before July 23, 2024, if you want to avail indexation benefit.
✅ After this date, flat tax without inflation relief will apply.

🧾 Need Help with NRI Property Tax Filing?

At WealthByRule, our team of Experts specializes in NRI taxation, property sale compliance, and Form 15CA/CB certification.

💼 Team Wealth By Rule – The House of Financial Experts

📞 Call Us: 99049 33311
🌐 Visit: www.wealthbyrule.com
🧾 India’s Trusted Partner for NRI Taxation, Compliance & Wealth Guidance