ecently I have taken up
U.S. citizenship. If I opt
for the dual citizenship
offered by India, is there
any possibility that my
U.S. income may be taxed in
India? What are the precautions
that I have to take?
-- Rustom Patel
Indian tax is payable depending upon residency status and
not on citizenship. Therefore, a
dual citizen who is an NRI (PIO
actually), working in the U.S.
won’t have to pay tax on his foreign income (foreign to India).
However, regardless of dual citizenship, if such person has an
Indian income, tax will be
I am an NRI living in the U.S. I am
thinking of buying property in India.
Would I need permission from any
authority in India like RBI? What
are other considerations to be
kept in mind before undertaking
– Sailesh Pant
You do not need permission
from the tax authority or even
from RBI to buy property in
India. Tax incidence on property
is also minimal unless you sell it,
upon which you have to pay capital gains tax. However, the most
important thing that you need to
take into consideration is that
you can buy or sell any number
of properties but you may repatriate funds relating to only two
properties in your entire lifetime.
Most NRIs, unaware of this rule,
end up trapping their capital.
Therefore, if you are thinking of
buying more than two properties, either now or later, you
should buy at the most two properties in each of your family
The limit is per person and not
for a family. So families of say
four members can potentially
acquire, sell and repatriate eight
I am a U.S. citizen born in India. I am
going to inherit a property in India.
Can I continue to hold the property
in my name and use it for my residence whenever I visit India? Do I
have to pay any tax on such property inheritance? Alternatively, if I
sell the property, then what are the
A: By virtue of being born in
India but being a U.S.
citizen, you will be a
Person Of Indian
Origin for the
purposes of the
law. You are free
to either hold the
property or sell it.
However, if you
decide to sell it, you
cannot sell it to an
NRI or a PIO, you
will have to sell it
to an Indian
gains tax will be
payable if you sell
Also note that
since India does
not impose inheritance tax, inheriting
the property per se will
not lead to any tax incidence
I have three NRE accounts in
India with different banks. I
from one such NRE account to
another NRE account. Would such
a transfer entail any tax incidence?
Transfer by itself does not create any tax liability. You may
freely transfer funds between
NRE accounts without any tax
I own a property in Bangalore,
India, that I wish to sell. Back when
I was in India, I remember the capital gain tax used to be 20 percent
on some assets and 10 percent on
other assets. Would you let me
know property sale will involve 20
percent tax or 10 percent? Also
can the Rs. 250,000 basic exemp-
tion for tax be adjusted against
the long-term capital gain
assuming that the person has
no other taxable income in
India? My cousin in India
who is an accountant tells
me this isn’t possible.
1. The option of
paying 10 percent
on profit (sale
minus actual cost
without indexation) is
not available in the case of
real estate. The tax
rate would be 20 per-
cent of computed
long-term capital gain.
This is of course
assuming that you
have been holding
the property for
over three years.
2. Your cousin
is right. The bene-
fit of the basic
exemption limit of
Rs. 250,000 is not
available for NRIs for
long-term capital gains.
I have been an NRI for over 20
years. I am planning to buy some
real estate in India. My questions are:
1. Do I have to fill any forms or
submit any documents with
any local authority there to
declare that I have to buy residential property in India?
2. If I was to rent the property, will I have to pay tax on
3. Can I put the funds after
the sale back in NRE account,
which will be not foreign currency?
4. In event of my death, if my
children, born abroad, were to
inherit this property, what are
their tax and legal obligations?
– Ravi Pradhan
A: 1. No forms or documents
need to be filled or submitted for
the purposes of buying real
estate in India.
2. All incomes, including
rental income earned in India
will be taxable in India.
3. Yes, the original amount
invested in forex is repatriable.
The capital gains, if any, are also
repatriable after you have paid
4. As of now, there is no
inheritance tax in India.
Therefore, given the current tax
laws, the inheritance per se
would not be taxable.
However, after becoming the
owners of the property, your
children will be subject to the
same tax structure as you are
facing, unless of course the law
The author may be contacted at won-
By Sandeep Shanbhag
India won’t tax dual citizen’s U.S. wages; NRI can buy overseas property
INDIA ABROAD August 18, 2017 30 BUSINESS