Capital gain
lina abood
(Querist) 24 January 2012
This query is : Resolved
DEAR EXPERTS
I NEED YOUR ADVICE ABOUT MY CASE WHICH I HAD ALREDY POSTED EARLIER BUT SINCE I DIDNT GET RESPONCE I HAD DECIDED TO TAKE YOUR ADVICE
FORIGNER WEMAN MARREIED TO INDIAN LAST 22 YEARS SHE HAS MADE INDIA HER HOME ,HER STATUS RESIDENT PROBLEM COME FROM SOME PROPERTY GIFTED TO HER BY HER FAMILY SHE HAD BROUGHT FLAT AND FORGOT ABOUT IT,
NOW DECIDED TO SELL THAT PROPERTY AND BRING THE CASH TO INDIA
AND IT JUST HAPPEN THE FLAT GOT SOLD AND THE MONEY GOT TRANSFER BY LEGEL ROUTE TO HER ACCOUNT IN INDIA ,
NOW HER C.A. TELLING THAT SHE HAS TO PAY CAPITAL GAIN TAX ON THE ENTIRE AMOUNT SHE HAD TRANSFER.
SHE HAD BOUGHT THE PROPERTY IN DEC.1990
PLEASE GIVE YOUR ADVICE AND SUGGESTION ON THIS MATTER
THANK YOU ALL,
R.Ramachandran
(Expert) 24 January 2012
As per international convention, capital gains received by a person by means of sale of immovable property will be taxed only in the country in which the property is situated. In the instant case, the Capital Gains tax will be payable only in IRAQ and not in India.
lina abood
(Querist) 25 January 2012
IF THIS MONEY DOSE NOT COME UNDER CAPITAL GAIN ,THEN WHAT RIGHT DOSE THE INDIAN GOVERMENT HAVE ON IT,
DO I NEED TO PAY ANY TAX AT ALL
R.Ramachandran
(Expert) 25 January 2012
Only income earned by a person is taxable by Indian Income Tax. It is your own money. Initially there will not be any tax. In case you invest that money anywhere and earn income by way of interest etc., then if that income is crossing the threshold income, then you are liable to pay tax, otherwise not.
Better once again consult your CA and explain.
lina abood
(Querist) 25 January 2012
I HAD INFORM MY C.A. THAT I HAD ALREADY PAID CAPITAL GAIN TAX ON THAT MONEY TO MY GOVERMENT AND I SHOWED HIM THE RECIEPT BUT HE SAID THE TAX TREATY DOSENT Exist BETWEEN INDIA AND MY COUNTRY AND AT THE MOST WE CAN DEDUCT THAT AMOUNT FROM YOUR CAPITAL GAIN TAX AMOUNT
A V Vishal
(Expert) 25 January 2012
Your CA is not knowledgeable person viz. not having sufficient knowledge of matters relating to International Taxation, hence advise you to go for a second opinion with a professional dealing with such matters.
soumitra basu
(Expert) 25 January 2012
Your C.A. is wrong. The money accrued and arose outside india is not taxable in india. Bringing cash from out side the country does not necessarily mean that it has to suffer tax. Only condition that it has to come in legal channel.
R.Ramachandran
(Expert) 25 January 2012
Dear Mr. Vishal and Mr. Basu,
The person concerned is a "Resident" of India.
This being so, any income derived by that "Resident" anywhere in the world is taxable in the hands of such "Resident" under the Indian Income Tax Act.
The only exception is if there is any DTAA between the two countries involved. In the instant case, it seems that there is no DTAA between India and Iraq.
In these facts and circumstances, I don't think the CA of the querist is wrong.
Perhaps, you may like to reconsider your views.
A V Vishal
(Expert) 25 January 2012
I don't change my view, my reply is in view of S.91 of the Income Tax Act.
R.Ramachandran
(Expert) 25 January 2012
Dear Mr. Vishal,
By saying that you go by Section 91 of I.T. Act, you are saying the same thing as the CA of the querist says.
Since there is no DTAA between the two countries involved, the querist at best will get deduction of the tax paid at the other country to the extent permissible under the said Section.
A V Vishal
(Expert) 25 January 2012
I have relied and replied in the context quoted by the querist that "NOW HER C.A. TELLING THAT SHE HAS TO PAY CAPITAL GAIN TAX ON THE ENTIRE AMOUNT SHE HAD TRANSFER.".
R.Ramachandran
(Expert) 25 January 2012
Dear Mr. Vishal,
I have a special regard for you.
The last post of the querist says as under:
".... HE SAID THE TAX TREATY DOSENT Exist BETWEEN INDIA AND IRAQ AND AT THE MOST WE CAN DEDUCT THAT AMOUNT FROM YOUR CAPITAL GAIN TAX AMOUNT"
Therefore, I thought you were telling the same thing when you said that you are relying on Section 91.
A V Vishal
(Expert) 25 January 2012
Mr RR, I am sorry but there is some communication gap, probably while I was in process of replying the query the querist made the post simultaneously hence I did not go to the latter part of her post, I once again regret for the misunderstanding.
lina abood
(Querist) 25 January 2012
Dear Sir please let me know after all this where I am standing ,let me know your final call,
thank you all
R.Ramachandran
(Expert) 25 January 2012
Dear Lina,
Your CA is correct. If there is no DTAA between India and Iraq, then after calculating the applicable Capital Gains Tax in India, necessary adjustment (to the extent permissible under Section 91 of Indian Income Tax Act) of the Capital Gains Tax paid by you in Iraq, will be given to you. In other words, you will not be required to pay Capital Gains Tax on the entire amount. The Tax will be calculated as though the entire tax amount is payable in India. However, adjustment of the Capital Gains tax already paid by you in Iraq will be adjusted. I reiterate, your CA is absolutely right.
lina abood
(Querist) 26 January 2012
DEAR SIR,
TAHNK YOU VERY MUCH FOR YOUR HELP
