I'm a 45-year-old NRI and have sold property in India. How to cut income tax and transfer money to Canada?

I am a 45-year-old non-resident Indian (NRI) and have sold a property in India. How do I deduct income tax and transfer money to Canada? What do I need to keep in mind?
Name withheld

Reply by Maneet Pal Singh, Partner, I.P. Pasricha & Co, says

NRI selling property in India will have to pay capital gain tax in India. Further, he/she can claim exemption from capital gains by investing in any other asset in India for claiming exemption u/s 54 and 54F etc.

NRIs can sell property in India and can legally repatriate the money to Canada. However, sometimes NRIs transfer the money illegally through processes like hawala, which may have serious repercussions from the I-T Department and ED as restrictions are placed on the maximum amount that non-resident Indians can repatriate to foreign countries out of the financial windfalls of the sale of property assets in India.

The NRI can sell property using online transfer and properly comply with the provisions of FEMA. Further, the tax liability depends on whether the asset is sold within a period of 2 years & less than two years. 

Long-term capital gains are taxed at 20%, and short-term gains shall be taxable at the normal income tax slab rate for NRI. Further, when an NRI sells the property, the buyer is liable to deduct TDS @20%. The buyer must deduct TDS before transferring any amount to the NRI seller at the applicable rates.

To continue, the NRI seller must submit Form 15CA and 15CB to repatriate the sale proceeds of a property. Form 15CB must be signed and submitted by a Chartered Accountant. Further, as per provisions of FEMA, NRI sellers can repatriate up to $1000000 in a year outside India.

(Views expressed by the investment expert are his/her own)