Hi,
I inherited a property in India which I would like to sell and send the proceeds to my resident country. I understand that since I do not want to buy Indian govt bonds or buy more Indian property, there will be significant capital gains tax in India. I accept this.

Since I want to put the money in the bank and then transfer it internationally, the buyer obviously needs to pay in 100% white money.

Is it very hard/impossible to find this kind of buyer, since the majority of property transactions in India involve substantial black money? In that case, what do sellers like me do? Is it common to find an NRI buyer who will be willing to pay overseas, thus avoiding this problem in India?
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  • Regarding taxation and/or B/W conversion, contact some chartered accountant in India. They know all tricks of the trade. Anything is possible in India, if you have right contacts. Sorry to say but this is the reality.
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  • It is not hard / impossible to find such kind of buyers (NRI or RI). I personally bought three properties in full white, and most of my friends prefer transactions in white. I think it really depends on where your property is and the cost of the property (as expected probability of finding full white buyer decreases with increasing cost).

    If I were to roughly summarize my experience: about 3/10 sellers were willing to sell to me in full white across all transactions

    Regarding finding a NRI buyer who pays in USD / etc for a transaction in India - it will be really tough! Not only because it complicates tax situation for that person in US / etc but also does no good in India. You have to anyway mention all instruments of payment and quote PAN at the time of MOU / registration and pay taxes accordingly.

    However, please do share your experience if you pull that off somehow, it will be a nice learning!

    If you are willing to play financial fifty shades of grey, you might want to consult some good CAs as suggested by naresh_kumar; I have heard of some amazing stories, yours might become one :)
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  • Hi. We might have a potential buyer who is willing to pay 2/3 in white Rupees and the rest he will pay directly in my residence country in that other currency. I would then want to convert the white Rupees and transfer to my residence country.

    I think this could work. In India we would be declaring the 2/3 white Rupees for the purposes of capital gains tax. In my resident country, we would declare the entire sale price and pay capital gain based on the entire thing as one is supposed to do (of course accounting for the basis and tax paid in India already).

    Does anybody see a problem with doing this?

    thanks
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  • Originally Posted by barryfaetheu
    Hi. We might have a potential buyer who is willing to pay 2/3 in white Rupees and the rest he will pay directly in my residence country in that other currency. I would then want to convert the white Rupees and transfer to my residence country.

    I think this could work. In India we would be declaring the 2/3 white Rupees for the purposes of capital gains tax. In my resident country, we would declare the entire sale price and pay capital gain based on the entire thing as one is supposed to do (of course accounting for the basis and tax paid in India already).

    Does anybody see a problem with doing this?

    thanks


    Your total tax will be per the rate which is the higher of tax rates between the countries - what may be tax exempt in india may not be in other country - why are you going for payment in combination of currencies ?

    NRI can sell property and repatriate money - I doubt whether your way will save you more on taxes .
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