Bring clarity in tax law on NRI's property sale in India: Vaibhav Sankla
When it comes to NRI's selling their property in India, the tax laws are not very clear and any payment received from the buyer by an NRI is subjected to TDS rates as high as 20-31% at times irrespective whether the income from such transactions is taxable or not.
The massive moves such as demonetization, passing of the GST bill along with other significant moves taken by the government in 2016 will lead to a huge increase in the tax payer base, greater tax compliance and increased revenue collection.
In the upcoming Budget 2017, the foremost expectation can be a reduced tax rate. The IDS scheme that the government launched last year is expected to add a lot of tax revenues to the government coffers. With almost Rs. 75,000 crores declared as black money at a tax rate of 45%, close to Rs. 35,000 will be collected as taxes.
Along with this, government is expected to gain a decent sum through the obsoleting currency and the newly launched Pradhan Mantri Garib Kalyan Yojana 2016 (PMGKY).
All these additional revenues are expected to help the government reduce the tax rates in the coming FY. Apart from this, considering that house rent is one of the major expense for an individual, it is a general expectation from the individual tax payers (especially for those living in metro cities and not receiving HRA) that the deduction under section 80GG should be further increased to Rs 10,000 from existing Rs 5,000 for metro cities.
This is because the rent for a decent accommodation in cities has risen and there is a need to increase the deduction so that salaried individuals get the benefit of this deduction.
Further when it comes to NRI's selling their property in India, the tax laws are not very clear and any payment received from the buyer by an NRI is subjected to TDS rates as high as 20-31% at times irrespective whether the income from such transactions is taxable or not.
It will be a welcome move if there is some clarity in the tax law provisions on this front so that NRIs do not have to bear the tax burden.
Vaibhav Sankla, Managing Director, H&R Block India