Capital Gain on Sale/Transfer of Immovable Properties by Non-Resident Individual:
Immovable properties i.e., plot of land, residential flats or house, commercial properties etc. are treated as Capital Assets u/s 2(14) of the Income-tax Act, 1961 (‘the Act’) and accordingly gains arising from the Sale/transfer of immovable property is chargeable to income tax under the head Capital gains.
Further, it must be noted that immovable property which is classified as Rural Agricultural land as per the provisions of the Act, is not treated as Capital asset and accordingly gains arising from the transfer of same is not chargeable to tax. It may also be noted that a land has to qualify certain prescribed conditions mentioned under the Act to be defined as Rural agricultural land.
The Capital gains on sale of Immovable properties may be classified into Long Term or Short-Term Capital Asset based on the period of holding as follows:
Capital Asset | Short Term | Long Term |
If transferred before 23rd July 2024 | If transferred on or after 23rd July 2024 |
Immovable property being land or building or both | If held for a period not exceeding 24 months from the date of acquisition. | If held for a period exceeding 24 months from the date of acquisition. |
Tax Rates applicable | As per applicable slab rates – Highest slab rate being 30%* | 20%* (with Indexation) | 12.5%* (without Indexation) |
Tax to be deducted at source by the Buyer, where seller is Non- Resident Indian (NRI) | 30%* | 20%* | 12.5%* |
*Plus applicable Surcharge, Health and Education Cess.
- Updated 10/2024