Tax for OCI PROPERTY SELLING

Dear Sir, My wife and I bought the residential property in Tamil nadu when we were there for 35 years ago as NRI and it was in my wifes name. Now she has changed the property to my name this year.We both have OCO card. My questions: 1. How much tax I should be pay?. 2.Will it be as Long Term or short term capital gain? 3.Do I have to pay tax both in India and to the resident country?. 4. We have loans in the resident country. Can we pay it with the selling money?. 5. Can we pay of our childrens study loan in abroad? 6. Can we gift some amount to our grand children?.

Thanks.

asked Aug 02 '12 at 13:44 by honestyxxxx 613


It would be a long term gain. See below computation for income tax:

Purchase Year = A, Purchase Cost = P, Cost Inflation Index (CII) for purchase year = X
Sale Year = B, Selling price = Q, CII for sale year = Y
Indexed Purchase price = P x (Y/X) = R
Long term capital gain = Q - R = S
Income tax on capital gain = S x 20%

  1. You will have to pay taxes in India and not in resident country.
  2. After paying income tax you can use money for paying loan abroad or gift it to grand children.

answered Aug 02 '12 at 14:02 by Pankaj Batra 5.2k320

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Thanks Mr. Pankaj. Never had so clear answer anywhere. Thanks a lot.Kumar ps. I want to give more points.There is no option for it? or I do not see it here.
(Aug 02 '12 at 16:08) honestyxxxx

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Asked: Aug 02 '12 at 13:44

Seen: 1,655 times

Last updated: Aug 02 '12 at 16:08