Lawyer in USA can advise you regarding your tax liability in USA
2) pay tax in India and then claim tax credit in USA
Lt gain tax in usa
1.I am a US Citizen with an OCI Card I bought a housing site iat Bangalore in 2008 for Rs 22 Lakhs and sold it for Rs 73 lakhs on 19/12/ 2019 Computed Capital gain in India is 73-51( Inflation Adjusted)= Rs 22 Lakhs. I was going to put it in Govt Bonds for 5 years and save the 20% capgain on the 22 Lakhs. 2. If I do the above am I still liable to pay tax in USA? 3.If there is a US Tax liability (a) Pay tax in India first and then claim tax credit in US or (b) or pay tax in US first and claim tax credit in India Which is better?
Asked 4 years ago in Property Law
Religion: Hindu
4 Answers
If i can claim thus is it better topay India tax for 2020/21 first and then lodge a Us 2020 IRS
Asked 4 years ago
Pay tax in India and contact a lawyer in USA
2. The exemption given in India for avoiding payment of LTCG taxes is for the income you have derived within Indian territories.
If you would reflect this income in your Income tax returns in USA, then yo may enquire about the local law involved in this aspect in that country.
3. You may please be aware that the taxation laws of both countries differ from each other.
You re liable to pay long term capital gains tax for the sale of immovable property in India, however you have claimed exemption to it in India as per prevailing law in India.
If you would like to make a mention to your income in your tax returns to be filed in US, you may enquire the formalities from your auditor of that country, he may be able to clarify the exact rules in this regard especially about the applicability of the double taxation method in this situation.
NRIs are allowed to repatriate or bring their sale proceeds of property sold in India to the US. However, the limit to the amount brought from India is $1 million per the calendar year, including all other capital account transactions.
Many countries tax the income of their residents regardless of where it originates from. While some provide partial or total exemption on capital gains arising from the sale of residential houses, others do not.
So, you need to be aware of incumbent rules in your country of residence and whether it has a Double Taxation Avoidance Agreement (DTAA) with India. For instance, if you are an NRI based in the US, you might need to declare capital gains or losses on the sale of property in India under Sec D of Form 1040. And you can deduct the taxes paid in India while calculating the capital gains taxes owed to the US Government since the latter has a DTAA with India.
However, if you did not pay any capital taxes in India because of reinvesting your capital gains (using above-mentioned options), you will still be liable to pay the taxes in the US.