Property sale in India and how to bring money to Canada and taxation on it (2024)

FAQs

Property sale in India and how to bring money to Canada and taxation on it? ›

NRI selling property in India will have to pay capital gain tax in India. Further, he/she can claim exemption from capital gains by investing in any other asset in India for claiming exemption u/s 54 and 54F etc. NRIs can sell property in India and can legally repatriate the money to Canada.

NRI selling property in India will have to pay capital gain tax in India. Further, he/she can claim exemption from capital gains by investing in any other asset in India for claiming exemption u/s 54 and 54F etc. NRIs can sell property in India and can legally repatriate the money to Canada.

Canadian taxpayers must report foreign assets and income using Form T1135 Foreign Income Verification Statement. That said, only certain assets and income must be reported. Tax-sheltered accounts and real estate that is for personal use are generally exempt.

Prior to transferring funds from India to the US you'll need to complete Form 15CB, and your bank will ask you to provide proof of the source of the money, such as a copy of the property sale agreement.

Tax on sending gift remittances to Canada

According to the latest remittance rules, any amount over INR 7 lakhs under the gift remittance category attracts a 5% TCS (tax collected at source).

To bring the proceeds of the sale of property from India to another country, NRIs or POIs should course it through legal banking channels. This would give them peace of mind knowing that their money will be safe. NRIs are cautioned against relying on private money transfers or “Hawala” as this is considered illegal.

No, in most cases, the CRA doesn't charge taxes on money sent from India to Canada. For example, if the money is sent as a gift, no taxes will be collected. However, if the money received is from the sale of an asset or from a business endeavour, you'll have to pay capital gains tax.

Since 1997, Canadians have been required to declare foreign property in excess of $100,000. If you previously forgot to submit this form, you can submit a Voluntary Disclosure to avoid costly penalties. When you do this, include T1135 forms from previous tax years with your disclosure.

Citizens Owe Taxes on Property Sales at Home and Abroad. Real estate sales are taxed as capital gains if you held the property for more than a year. They are taxed as income if you held it for less than 12 months.

If you sell your foreign property, you may be able to make a 1031 exchange (also called a like-kind exchange), in which you swap one investment property for another similar property on a tax-deferred basis. Many investors use this strategy to defer paying capital gains and depreciation recapture taxes.

How much money can I transfer from India to USA tax free? ›

How to transfer money from India to the USA without paying taxes? Non-Resident Indians (NRIs) can repatriate a maximum of $1 million without paying any tax on money transfers from India to the USA.

As per the Liberalized Remittance Scheme (LRS) limit, USD 2,50,000 or its equivalent can be remitted abroad in a financial year. RBI approval is required if the remittance amount exceeds this limit.

The best way to transfer money to the USA from India is to use a reliable money transfer service that can deliver your money to your loved ones quickly and safely. When you use Western Union to send money from India to the USA, you can be confident that your loved one will receive their money right when they need it.

How much money can I gift to my parents or spouse in the USA? Indian residents, including parents and individuals, can send up to $250,000 per fiscal year through the Liberalised Remittance Scheme (LRS). There are no restrictions on the frequency of remittances, but the annual total must not exceed $250,000.

Can my parents give me $100,000? Your parents can each give you up to $17,000 each in 2023 and it isn't taxed. However, any amount that exceeds that will need to be reported to the IRS by your parents and will count against their lifetime limit of $12.9 million.

Whether you are leaving or entering Canada, you must declare any currency (cash) or monetary instruments valued at CAD $10,000 or more that you are carrying.

You can send money directly from India to most banks across Canada. Find out the costs² of an online money transfer to Canada before you send, with no obligation to transfer. To send money to a bank account, you'll need to have the recipient's name and bank account details ready.

There are no restrictions on the amount of money you can bring into or take out of Canada, nor is it illegal to do so. However, any time you cross the border, you must declare any currency or monetary instruments you have in your possession that are valued at CAN$10,000 or more.

Wire transfer is the easiest and best way to remit money to Canada from India. Though wire transfers are actually done by banks, it is cheaper to use the services of companies like BookMyForex.

Immovable property such as land, building, apartment, individual house, etc. is termed as a capital asset for the purpose of income tax computations. Thus, the amount received from sale of a property is treated as capital gains, and hence attracts Capital Gains Tax.