The Finance Ministry indicated the rise in the speed of re-monetization and that the effects of demonetization will not sprawl across the next financial year.
Here is a synopsis of what the Union Budget 2017-18 tells NRIs
Reforms on Property Tax
If you want to sell your property, TDS on the Sale of Property does not apply
You cannot avail tax exemptions if you sell the property to a foreign company
You can sell your immovable property only to residents, Indian companies, PIOs or NRIs
You must possess lower tax deduction certificate, or a non-deduction certificate, etc. to be able to sell your property
You can claim a refund for LTCG (Long-Term Capital Gains) if you are eligible for the latter
The Government of India has created a strong market for Indian Real estate by making properties affordable. Affordability and ready-to-move option are two best bets for you to invest in Indian real estate. RERA (Real Estate Regulation Act) and demonetization offer a green signal for investing in property, boosts transparency, and generate interest and purchasing power.
LTCG Taxation for NRI
The holding period of capital gains from sale of property such as land and buildings has been reduced from three to two years.
You are eligible for various exemptions in case of LTCG
Indexation adjusts the purchase price based on the inflation during the holding phase while relaxing your tax burden
While computing the LTCG, the repair and renovation expenses can be added to the cost of acquisition
The interest you paid during the preconstruction period of the property can be added to the property cost unless you have claimed it as a deduction already
You can avoid paying tax by using your entire gain (from selling the property) into buying another house within two years or building another house within three years. Both should be done in your name
You can also invest the LTCG in three-year bonds of Rural Electrification Corporation Ltd. and National Highways Authority of India within six months of selling the property. The new budget proposes a longer list of companies whose bonds you may buy. You may invest upto Rs. 50 lakhs in bonds per financial year.
All these changes are to encourage sellers to disclose the accurate property price.
Read more taxable income sources for NRIs