Readers corner: Tax solutions

I am no longer a citizen of India but I own a property here. I want to sell it off, and the ongoing rate is around Rs 15 million. What will be tax implications as I am no longer an Indian citizen? In which category of bank account do I park the money? How much funds can I repatriate abroad?

Any gains earned on the sale of the property is subject to tax in India. Whether gain would be long term or short term would depend on the holding period of the property. If held for more than two years, the resultant gain shall be termed as long-term capital gains (LTCG) and would be subject to tax at 20 per cent plus applicable surcharge and cess. You will also be eligible for indexation benefit, that is, the cost of acquisition and/or improvement would be increased for the inflation factor over the holding period. Any expenditure incurred in relation to the sale of property such as brokerage, etc, is also deductible. 

You are no longer a citizen of India, but you have not mentioned whether you are non-resident of India. If you are non-resident, the buyer will withhold tax at the maximum marginal rate applicable in your case unless you provide him with the lower withholding certificate obtained from Indian tax authorities. Otherwise, you will need to claim a refund of excess taxes deducted at the time of filing your return of income in India. Further, you may also be subject to tax on such gains in your overseas country in accordance with its local tax laws. You need to check whether India has a tax treaty with the country where you are resident, which can give you relief from from double taxation. Regarding your other query on remittance of sale proceeds, you may reach out to your authorised dealer (banker) to get guidance.

I run a small business. For the past two years, I have been filing the return under the presumptive taxation scheme (PTS). I have read that compliance for PTS is stringent this year onwards. Should I opt for filing my return using ITR-4 instead? At least, I can claim my actual expenses. What are the things that I need to keep in mind if I am changing the form that I use for filing returns?

There are not many changes in the compliance requirements under presumptive taxation scheme this year. The return form prescribed for reporting income under presumptive taxation scheme for the tax year 2017-18 is ITR-4. There are no significant changes except little details are being sought — GST registration number, capital account details, etc. You can continue to opt for this scheme in future years considering you will not have to maintain books of accounts and get the same audited if the turnover exceeds the prescribed limit (Rs 20 million). If you still wish to opt out of this scheme, you will have to maintain the books of accounts and also get them audited as applicable. Once opted out, you will not be able to avail the benefit of this scheme for the next five years, that is, starting 2018-19 till 2022-23. Also, under presumptive taxation, the chances of scrutiny by the tax department are lower than that in the net income basis taxation.

I am salaried and have been trading in stocks for the past one year. When filing my returns, which ITR form should I opt for? I have made three-four futures and options transactions only to learn and understand how it works. Most of my trading is in direct stock.

It seems from your query that your primary source of income is salary earned by you from your job. You have engaged yourself in trading only as a hobby to understand and learn. It is not a recurring or routine feature and can be considered as one-off activity. Considering this, you may disclose the income earned as capital gains.
The writer is partner and leader, personal tax, PwC India. The views expressed are the expert’s own. Send your queries to

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