Ans.

Question: I am OCI card holder and staying in india for from last 1 year . I have property here . Do i need to pay more capital gain on selling it than normal residents . I am considered tax resident right ?

1. Tax Residency Status in India

According to Indian Tax Laws (Income Tax Act, 1961):

• You are considered a tax resident if:
  • You have stayed in India for 182 days or more in the financial year.
  • OR stayed in India for 60 days or more in the financial year and 365 days or more in the preceding 4 financial years.

Since you mentioned staying in India for 1 year, you will likely qualify as a Resident for tax purposes.

Implication:

• As a tax resident, your global income is taxable in India (including income from the sale of property in India).

2. Capital Gains Tax on Sale of Property in India

Tax Rate on Capital Gains:

• Short-Term Capital Gains (STCG): If the property is held for less than 2 years, gains are taxed at your applicable slab rate.
• Long-Term Capital Gains (LTCG): If the property is held for more than 2 years, gains are taxed at a flat 20% with indexation benefits.

Do OCI Holders Pay Higher Taxes?

• No, as a tax resident, you are treated the same as other Indian residents regarding capital gains tax rates.
• There is no additional tax burden for being an OCI holder.

3. TDS (Tax Deducted at Source) on Sale of Property by OCI Holders

• If the buyer believes you are a Non-Resident, they might deduct TDS @20% (for LTCG) or as per slab rates (for STCG) under Section 195.
• However, since you're a tax resident, you can provide your tax residency certificate (TRC) or documentation showing your tax resident status to the buyer to ensure no higher TDS is applied.

4. Repatriation of Sale Proceeds (if transferring abroad)

• As a resident, you can repatriate up to USD 1 million per financial year after paying applicable taxes.
• Ensure you have documentation showing tax clearance (Form 15CB and 15CA from a Chartered Accountant).

5. Compliance Steps for OCI Cardholders

1. Verify your tax residency status with documentation.
2. Calculate capital gains tax based on whether it's short-term or long-term.
3. If applicable, apply indexation benefits for LTCG.
4. Ensure the buyer deducts the correct TDS.
5. File an Income Tax Return (ITR) in India to report the sale and claim any refund (if excess TDS was deducted).

Summary:

• Yes, you are considered a tax resident if you meet the residency criteria.
• OCI holders do not pay higher capital gains tax compared to regular Indian residents.
• Ensure correct TDS is applied and file your ITR to report the transaction.

If you need detailed assistance or clarity, consulting a Chartered Accountant (CA) specializing in NRI/OCI taxation is advisable.

How Legals365 Can Help OCI Cardholders with Property Taxation in India

Legals365 offers comprehensive legal and taxation assistance to OCI (Overseas Citizen of India) cardholders for property transactions in India. Whether you're selling property, calculating capital gains tax, or ensuring compliance with repatriation rules, our team of legal and financial experts ensures a smooth and legally sound process.

✅ 1. Tax Residency Determination

• How We Help:
  • Assess your tax residency status under Indian law.
  • Provide guidance on meeting residency requirements to optimize tax liabilities.

Benefit: Clear understanding of your tax obligations as a resident or non-resident.

✅ 2. Capital Gains Tax Calculation

• How We Help:
  • Accurate calculation of Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) taxes.
  • Guidance on indexation benefits for LTCG.
  • Assistance with claiming tax exemptions under Section 54 and 54EC.

Benefit: Minimize tax liabilities through strategic tax planning.

✅ 3. TDS Compliance

• How We Help:
  • Ensure correct Tax Deducted at Source (TDS) is applied under Section 195.
  • Help buyers understand their obligations when dealing with OCI sellers.
  • Assist in obtaining Form 15CA and 15CB from certified Chartered Accountants.

Benefit: Avoid excess TDS deductions and streamline documentation.

✅ 4. Legal Documentation for Property Sale

• How We Help:
  • Drafting and reviewing Sale Agreements and Deeds.
  • Ensuring compliance with local property laws.
  • Verification of buyer credentials to avoid legal complications.

Benefit: Legally secure property transactions with comprehensive documentation.

✅ 5. Assistance in Repatriation of Funds

• How We Help:
  • Guidance on repatriating sale proceeds under the USD 1 Million Rule.
  • Assistance with RBI approvals and documentation for fund transfers.
  • Compliance with FEMA (Foreign Exchange Management Act) regulations.

Benefit: Hassle-free repatriation of funds to your overseas accounts.

✅ 6. Filing Income Tax Returns (ITR)

• How We Help:
  • Assist in filing ITR in India to report capital gains.
  • Claim refunds for excess TDS deductions.
  • Provide end-to-end support for annual tax compliance.

Benefit: Ensure complete compliance with Indian tax regulations.

✅ 7. Legal Advisory for OCI Property Owners

• How We Help:
  • Provide legal consultations on property tax and compliance.
  • Guide you through any disputes arising from property sales or tax matters.
  • Representation in legal proceedings if required.

Benefit: Peace of mind with professional legal guidance at every step.

Why Choose Legals365?

• ✅ Experienced Legal & Tax Experts specializing in OCI taxation.
• ✅ Tailored Solutions for property sales and capital gains compliance.
• ✅ Seamless Documentation & Compliance Support.
• ✅ Transparent Communication throughout the process.

Get in Touch Today!