FATCA scaring US NRIs to sell off investment properties in India
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Some US-based NRIs are under the impression that a new information-sharing protocol might bring their assets, financial details and capital market investments in India under the scanner of US tax authorities. This is the reason why many of them are considering selling their properties in India, even at discounted rates as the The protocol under question is called the US Foreign Account Tax Compliance Act (
Even though it’s easy for the Indian government to take notice of mutual funds and bank accounts held by NRIs, identifying property held by them is not a cakewalk.
However, with the new law coming in action and proper regulations being unclear to commoners, NRIs are anticipating that with time, details of their assets would be shared with US authorities automatically, which they want to avoid and are hence selling off their properties.
The last decade saw many NRIs investing in Indian properties, because of the boom that the industry had seen. Many of these investments were done in coming-of-age cities, like Gurgaon.
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As of now, there are two schemes in the US under which NRIs can declare their wealth back home in India. In the first, there is no penalty for those who claim that they were unaware of the liability, although they have to pay the tax for income generated over the past three years. In the second scheme, however, one is required to pay back taxes for eight years, along with interest as well as a 27.5% penalty to compensate for non-compliance.
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