I got transferred to my US office from my India office four months ago. In the US, I received a complete new set of employee ID, and salary account. Do I need to pay tax in India on the amount earned in US?
You were a resident in India during the previous year ending March 31, 2025 for the purpose of income tax, as you were in India for a period of 182 days or more and you were also a resident of India for nine out of 10 years.
Under the Double Tax Avoidance Agreement between India and the US, the salary received by a resident of India in the US is taxable in India. So you will have to include the salaries received in the US in your income tax return (ITR) that you will have to file in India.
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My father had bought a property in 1986 which was bequeathed to my wife under the Will of my father. My father passed away in 2009. We are planning to sell this now. How will the tax liability be computed?
I presume your wife became owner of the property which is a residential house. Any capital gains arising on sale of a house held for more than 24 months are treated as long-term capital gains (LTCGs) and taxed at special rate of 12.50 per cent.
Presuming that your wife is a resident taxpayer under the income tax laws, she has the option to pay tax at a special rate of 20 per cent on indexed LTCG or at 12.50 per cent on unindexed LTCG. Since the property was acquired prior to April 1, 2001, your wife has the option to take the fair market value of the house as on April 1, 2001 as the cost for computing LTCG whether under indexation or without indexation. Do note that the fair market value of the property as on April 1, 2001 cannot exceed the stamp duty valuation of that date.
She can claim exemption under Section 54 of the Income-tax Act, 1961 by investing the amount of actual capital gains for purchasing or constructing another residential house in India within the prescribed time period. She can also avail of the tax exemption under Section 54 EC by investing capital gains in the bonds of specified financial institutions within the prescribed time period. Please note that one can invest only up to a sum of Rs. 50 lakh in these bonds during one financial year as well as for claiming exemption on LTCG for one year. You can claim both the exemption simultaneously.
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I sold one plot and received two cheques in March 2025 which were cleared in the March 2025 in our bank account. Another two cheques were received in April 2025, and the registration was done on April 15, 2025. Will the sale be considered in financial year 2024-2025 or 2025-2026 for calculation of capital gain?
For the purpose of determining the date of sale, neither the date on which you receive the money nor the date on which the agreement is registered are relevant. The relevant date for ascertaining the date of sale is the date of execution of the sale agreement.
So, in case the sale deed was executed in April, the sale will be considered in financial year 2025-2026 for calculation of capital gain. However, if the agreement was executed in March 2025, but registered in April 2025, the capital gains will be taxable in the year 2024-2025 and not 2025-2026. Though the registration of documents for transfer of any immovable asset is mandatory for the transaction to become complete, but the registration relates back to the date of execution of the agreement.
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The author is a tax and investment expert and can be reached on jainbalwant@gmail.com
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
