OCI can give power of attorney for property sale

OCI can give power of attorney for property sale

I am a US citizen with OCI status. I am purchasing a flat in Hyderabad for my parents. This property will be sold at the same price to my parents when they have funds available in 2-3 years. As I will be selling to my parents I do not want to make a profit on the flat. The fund to pay for the flat is being paid by me through my savings in the USA. As per RBI regulations, I understand that the principal amount is repatriable back to USA. My questions are: 1) Do I have to pay any tax on the principal amount in India if I do not make any profit? 2) Do I have to pay any tax on the repatriated principal amount if I do not make any profit? 3) Can I repatriate the profit amount if I make any? Is the profit amount taxable in India? 4) I am using remit2india facility to transfer money from US savings bank account to the builder's account in India. Does this qualify as proper procedure so that I will not have any issues while repatriating in US dollar? I ask this since remit2india is not a regular bank. The price for any property sale will be taken as the higher of the actual selling price or the price as per the stamp duty valuation. This rule has been put in place to prevent intentional undervaluation of property transactions to evade tax. So when you sell the property to your parents, it will be have to be done at least at the value adopted for stamp duty purposes existing at that time. If this results in a profit, you will be liable for capital gains tax. Here too, if you hold the property for over three years, the resultant profit will be taxed as long-term capital gains. Any lesser holding period will entail payment of short-term capital gains tax. The tax on long-term capital gains at 20% after reducing indexed cost is much lower than that applicable to short-term capital gains which are basically taxed at slab rates applicable. Therefore, it would be advisable to sell the property after three years instead of two. You are free to repatriate the net gains after paying or providing for due taxes. Though you may use any money transfer facility for payment for the property, it would be best if you could open an NRE account in India, transfer the funds from your US bank account to this account and then issue a cheque therefrom. This will enable you to maintain a clear audit trail and record in case there is any requirement to produce the same later on.