Hi folks, They are very skilled people and they know that If the property is transferred and then sold, then the relative can send back the money to the US citizen. He can send around $2500000 (Rs.16.6 crore)/annum. In cases where the property is not transferred, the cash could be kept in a separate account or tax paid on the amount received through the cheque.
Hi Raksht, You have a good knowledge on NRI Properties. Currently there are two schemes operational in the US for NRIs to declare their wealth back home in India. Under the first scheme, there is no penalty for those who declare they were unaware of the liability, although tax for income generated over the past 3 yrs. has to be paid.
In the other scheme, back taxes for 8 yrs. can be paid along with interest as well as a 27.5% penalty to compensate for non-conformity.
Because of such issue, NRIs are not only selling their property in India but also avoiding investing in the country as it may lead to tax complications in the future. On the other hand, Indian banks are hesitant to open accounts that will help US-based NRIs to invest in India because it will increase their reporting obligations.
Hi, But there is a confusion and fear that new information-sharing agreement may bring their assets, bank accounts, mutual funds and capital market investments in India under the scanner of US tax authorities.
@Daniel, But inquiries of property in India by US clients has increased over the past two months. Some of these people are seeking more clarity on the issue. They are confused about what's happening and how to deal with it.
Hello seshagiri, It is not as easy for the Indian government to identify property held by NRIs in India and it is totally different from case of mutual funds and bank accounts. In spite of that, the NRIs expect that as systems become more strong, details of their assets will be shared with US authorities automatically and they want to act before that happens.
Many NRI's have invested in property in India over the past decade when the property market was at its peak in India, especially in areas such as Gurgaon. They want to sell the property immediately as he intends to stay clear of the regulation. While some US-based NRIs are transferring their property to relatives before selling them, others are going ahead with an outright sale.
Even i was reading an article today that India and the US recently agreed to implement the US Foreign Account Tax Compliance Act ( FATCA), a law aimed at ensuring that tax is paid on income generated from wealth parked overseas. Under the agreement, they would share information about citizens with assets in each other's countries.