Transferring sale proceeds abroad

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., Updated At : 11:39 AM Mar 08, 2025 IST

Limited time to save up and buy a property. Concept of inflation, raising the price of housing by percentage each year.

Q. My mother inherited a residential house in Ludhiana and some agricultural land in a nearby village. She now resides in Singapore. We plan to sell the residential house and the agricultural land and transfer the proceeds to her account in Singapore legally. How can we transfer the money and do we have to pay any taxes? Amarinder Gill, Doraha

It is presumed that your mother is settled in Singapore for good. Reply to your queries is based on the said presumption:

(i) Profits on sale of plot of land and agricultural land would be taxable in accordance with the provisions of the Income-tax Act 1961. The relevant provisions are explained hereunder:

(ii) The capital gain arising on the sale of plot would be exigible to capital gains tax. In case the plot was held for a period of more than 24 months, the capital gain arising on such sale would be treated as long- term capital gain which would be taxable. The amount of capital gain would be computed after deducting the original cost of acquisition from full value of sale consideration. In case the plot was acquired before 1.4.2001, fair market value as on 1.4.2001 can be substituted in place of original cost. The same will be indexed to the year of sale to arrive at the deductible amount. The indexation is to be done as per the prescribed rates.

(iii) The capital gain arising on the sale of agricultural land would be taxable in case such land is situated:

(a) In any area within the jurisdiction of a municipality or a cantonment board which has a population of not less than 10,000; or

(b) In any area within the distance measured aerially;

(1) Not being more than 2 km, from the local limits of any municipality, or cantonment board referred to in item (a) above and which has a population of more than 10,000 but not exceeding 1,00,000; or

(2) Not being more than 6 km, from the local limits of any municipality, or cantonment board referred to in item (a) above and which has a population of more than 1,00,000 but not exceeding 10,00,000;

(3) Not being more than 8 km, from the local limits of any municipality, or cantonment board referred to in item (a) above and which has a population of more than 10,00,000.

(iv) The amount realised on the sale of residential house as well as on the sale of agricultural land can be remitted without any difficulty within the prescribed limit under Liberalised Remittance Scheme, of course after making the payment of taxes due, if any on such sale. You can approach your bankers who would be able to guide for remitting the amount realised on the sale of plot as well as on the sale of agricultural land.

Transferring sale proceeds abroad

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