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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4191
Experience:  FCCA FCMA CGMA ACIS
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I have to take 150K from a friend in UK in return property

Customer Question

I have to take 150K from a friend in UK in return for a property I have given to him in India. What kind of taxes will I have to pay on this 150K. I am salaried professional.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello. I am Keith, one of the experts on Just Answer, and pleased to be able to assist you with your question. Please advise, are you resident in the UK and what did you pay originally for the Indian property? Once I have this data I can help you further.
Customer: replied 2 years ago.
Hi Keith, yes, I am a resident here for the last 2 years and I bought the property when I was an Indian resident for 50K GBP about 10 years ago. Thanks
Expert:  bigduckontax replied 2 years ago.

You have made a capital gain of some 100K.

This is taxable in India at Income Tax rates. 0% on the first 200K rupees, 10% 200K - 500K, 20% 500 to 1 million and 30% thereafter. The conversion rate is currently of the order of 98.65. Your gain is thus 9.896 million IR. You will pay about 2.799 million IRs in tax; say GBP 28314.

Under the Double Taxation Treaty between the UK and India this tax is allowed against any UK Capital Gains Tax liability. As far as the UK is concerned you could be facing a tax bill of some 28K, worst case scenario, but the Ind***** *****ability is about the same so the tax credit will remove any UK liability.

So it all falls to what the Indian Tax authorities charge you. I do hope my reply has been of some assistance. You may well need a trusted local agent in India to assist in this matter.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.