I'm an NRI but don't have any NRE / NRO accounts. I wish to sell a real estate property I own soon after getting possession. I heard the TDS rules are stricter for NRIs over residents.

Q1) If I don't declare myself to be an NRI during the sale process, who can find out and how? I'm assuming I will need to provide my PAN / Aadhar card during the sale transaction, but that still doesn't identify me as an NRI, correct?

Q2) How is capital gain computed for a sale? How do I find the indexed value for this computation?

Q3) If I do end up declaring myself as NRI, is the TDS computed over the sale price or the capital gain?

Q4) I don't intend to re-invest the proceeds in real estate - are there any bonds I can invest in to get Nil tax deduction certificate? How are the returns on those bonds - is that a good financial strategy to avoid taxes?

Q5) As a US resident, I'm required to pay taxes on my worldwide income. If I don't declare my capital gains from the property sale in India, would IRS in US find out - how?

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  • Also, for the purposes of determining long-term / short-term capital gain, what is " date of purchase" a) date of possession? b) date when booking was done?
  • Return on those bonds are zilch. IRS will get to know if you’re going to transfer the money to the US at some point. If you keep your money in India and don’t declare yourself as NRI then no TDS but I would always prefer to be honest and keep things simple. If you bought your property on a construction linked plan then capital gain will be computed with respect to the dates of the individual demand letters. Obviously, not the date of booking - that would be great for the seller though!
  • Buyer of an NRI sold property experience:-

    A1 - HINT - chor wahi jo pakda jaaye. The bank does not see passport, so i guess this hardship can be avoided by not showing your NRI status.

    A2 - 20.66 % on LT and 33% on ST

    A3 - On complete property transaction and not the gain. Indian govt doesn't trust NRIs.

    Rest answers dont know.