Posted on: 14-08-09 12:52:46
Here are some info about myself
I am in Canada but on PR for last 2-3 years & citizenship in Process
I bought some property in India ( Apartment ) almost 6-7 years back when I was in MiddleEast.
I took NRI home loan & which was already paid in full before I settled in Canada
Now I want to sell my property but worried about Taxes & other issues
I spoke to few CA's in India but getting different & confusing information
So if any one went through this process recently, please share
Here are some basic info about property -
Price while purchasing roughly Rs 7, 00, 000 ( during year 2003-04 )
Price expected during sell roughly Rs 18 to 19 Lacs ( as of today )
How I can save taxes on capital gains ?
What options I have ?
Here is information I am getting from CA's -
-If I can show amount of Rs 9,00,000 or Rs 12,00,000 on property deal while selling, I can save all taxes ( amount is different from different CA )
-If I re-purchase any new property in same financial year, I don't have to pay any taxes
-The total amount which I get can invest in Govt bonds, but interest rates are not so attractive & also amount will get locked for 5-7 years
- I can open Capital Gain Saving Account in any National Bank in India. Deposit all those funds getting from property deal & I have two financial years to use those funds for buying new property
How things will work I am not sure ?
Also I don't have any PAN in India, can I still go ahead with Property deal or I might face any difficulty ?
Please share your thoughts
Thanks
As I am told by my auditor, u have 2 yrs to re invest the money. Note that majority of the second sales are mainly by cash (more than 50% cash) to reduce the registration charges.
KM
Please bear in mind that at a later date if you wish to repartriate the money to Canada , you are better off paying capital gains tax ... other wise you would not be able to account for transfer through correct channels .
As an NRI you can repartriate 2 properties and if you have been putting these properties as Assets outside Canada from your first return onwards , CRA would exempt you from capital gains in Canada on these to the amount you have mentioned .
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Fido.
Quote:
Originally posted by Fido
Please bear in mind that at a later date if you wish to repartriate the money to Canada , you are better off paying capital gains tax ... other wise you would not be able to account for transfer through correct channels .
As an NRI you can repartriate 2 properties and if you have been putting these properties as Assets outside Canada from your first return onwards , CRA would exempt you from capital gains in Canada on these to the amount you have mentioned .
Hi Fido,
can you please elaborate more on this topic..
i have a situation here where i have to bring money by selling two flats in india. Both the flats are on my dad's name even though that money used to buy is sent from here.
What are my options here with out getting capital gain taxes..
I am also planning to buy a house here using that money..does that gives an excemption from world income or capital gain tax..
thank you in advance
mrk
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MK
If perchance the money was sent to your own account and your Father had a Power of Attorney to buy and sell on your behalf and the money was taken out of that particular NRE Account, then, it can go back into the same account and you can pull it back. The excess could be looked after by your Father. (The difference between the selling price and the buying price, if it was a gain)
Now that the properties are your Father's and he sells it, it will attract the Capital Gains tax, only if the period it was held is less than three years. (Please check with your Accountant about this number of years. It could have moved up) If it could be adjusted to reflect NIL gains, then, you can ask your Father to GIFT that sum to you and that could be brought to Canada through the exchange process. Please see the Bank Manager near by, who can help you in the conversion.
There is no Gift Tax in Canada. There is No gift tax on the exchanges between Father and Son in India.
Hope this helps you a little.
When is the GrahaPravesha?
With kind regards,
Freddie.
Quote:
Originally posted by ftfl
If perchance the money was sent to your own account and your Father had a Power of Attorney to buy and sell on your behalf and the money was taken out of that particular NRE Account, then, it can go back into the same account and you can pull it back. The excess could be looked after by your Father. (The difference between the selling price and the buying price, if it was a gain)
Now that the properties are your Father's and he sells it, it will attract the Capital Gains tax, only if the period it was held is less than three years. (Please check with your Accountant about this number of years. It could have moved up) If it could be adjusted to reflect NIL gains, then, you can ask your Father to GIFT that sum to you and that could be brought to Canada through the exchange process. Please see the Bank Manager near by, who can help you in the conversion.
There is no Gift Tax in Canada. There is No gift tax on the exchanges between Father and Son in India.
Hope this helps you a little.
When is the GrahaPravesha?
With kind regards,
Freddie.
Thanks freddie,
I guess my option is to get as gift from india to canada. Inorder to do that i have to go thru the bank exchange routes. This is the best route i guess.
But in any case i might be loosing in this transactions as per below reasons.
- I bought these flats when the market is peak in india and i am not gaining by selling them..infact might loose some money too..
- I bought the flats by sending money @ 38/CAD and now i might be getting them back as gift @ 46/CAD...lossing again..
what a fate..it looks like real estate investement turned bad too me...lol...
But its ok..as you know i profitted thru comodities...that nullifies my gains..
as far as the "Gruhapravesham"..i guess it might not be that soon...first of all need to get a decent full time position to get decent interest rate..(hope it wont go by then)
second i need to complete the property transactions back india..
I am hoping all these things happens in next six month even more..
well lets hope the best..
rgds
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MK
In a way its better that the properties are in your father's name as NRIs are expected to keep investment in Indian property for at least 10 yrs before repatriating .
Although its a personal decision but appreciation in property is higher in India then here and I would have kept the properties in India for a couple of more years till the exchange rate and real estate was good in India .... and take extra mortgage here .
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Fido.
