BackUnused per day allowance would be taxable in India
Per day allowance paid to meet ordinary daily living expenses is exempt from tax to the extent such expenses are actually incurred
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I have a property in Delhi that I want to sell now. I want to sell the house because I have been abroad for many years and do not intend coming back any time soon. I have had this property in my possession since 1995. I wanted to know how will I be taxed upon sale of this property? Is there a way one can lower the tax incidence on such a transaction?
—Harish Govardhan
Capital gains from sale of a property located in India are taxable in India (irrespective of residential status of the individual). Any immovable property held for a period of more than 36 months is classified as long-term capital asset. Any gain arising from sale of such a long-term capital asset is taxed at the rate of 20% (excluding surcharge and education cess).
This is the formula for how such gains will be taxed:
Taxable capital gains = Net sale proceeds less indexed cost of acquisition (i.e., adjusted as per cost of inflation index) less indexed cost of improvement.
Long-term capital gains can be claimed exempt to the extent they are re-invested in India in specified bonds or a residential house (to be either purchased within two years or constructed within 3 years of transfer of property). There are certain restrictions, however, on the sale of new asset bought and the quantum of investment that can be made in bonds.
If due to some reason, the capital gains from sale of house remain uninvested until the due date of filing of India tax return (i.e., 31 July), then an option is available to put the amount of capital gains in a Capital Gains Account Scheme (CGAS) with a bank (not later than the due date of filing India tax return).
You can then subsequently withdraw this amount in the CGAS for re-investment in specified bonds or a residential house in India.
I want to save a big portion of my per day allowance that I receive. I also want to bring/remit this amount to India. I want to know if I will have to pay tax for bringing this money into India?
—Kamini Thakur
As per Indian income tax law, per day allowance paid to meet ordinary daily living expenses while an individual is away from his normal place of duty is exempt from tax to the extent such expenses are actually incurred.
Therefore, the amount of allowance that is not spent on ordinary living expenses would be taxable in India.
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