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First off, I am an US Citizen currently living in the US. I bought a property in India in 2000, when I was not a US citizen but was still living in the US.

Over time it has appreciated and now has the approximate sale value of $600K. If I were to sell it now, how would I go about transferring that money to the US, and what taxes would it be subject to? Mainly I am going to use the money to pay for my children's tuition fees.

EDIT:

1. What was your status in India when the property was purchased. How was the property funded?

I was a US resident, holding a greencard. In India, I was a PIO, and I still am a PIO holder. The property was funded through my personal savings (in the US), and I bought it as an investment.

Thanks for the help.

  • What was your status in India? Only Indian nationals and PIO can purchase property in India. – Dheer Jan 1 '16 at 4:21
  • I was a PIO holder @Dheer. I've edited the question as well. – Jay S. Jan 1 '16 at 5:02
  • When you were a US resident with permanent immigrant status, your official designation was a NRI (NonResident Indian) and not PIO (Person of Indian Origin which means a noncitizen of India with some connection to India, viz. ex-citizen or child or grandchild of a citizen or ex-citizen of India). You don't have to have a PIO card to be a PIO; you became a PIO when you renounced your Indian citizenship to become a US citizen. – Dilip Sarwate Nov 26 '16 at 13:40
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There are quite a few details missing.

What was your status in India when the property was purchased. How was the property funded?

As your status now is PIO, assuming you have registered as PIO, and the purchase was funded from NRE account;

You can credit the original purchase price into NRE account and repatriate. The capital appreciation has to be credited to NRO, tax paid and apply for repatriation. A certificate from qualified chartered accountant is required. Essentially it certifies you have paid tax and are compiling with FEMA (Foreign exchange management act)

If you are not registered as PIO, you would need to apply to RBI (Reserve Bank of India, similar to fed) for permission to sell as this transaction falls under FEMA.

You would in any case need a CA. A lawyer would also help.

Assuming you were reporting this property in your US IRS returns ... You are liable for taxes in US.

India and US have some amount of DTAA( dual tax avoidance agreement)

  • Please take a look at my edit. Thank you for your help. Many of the terms you've mentioned seems very unfamiliar to me. What is a CA certificate ? What is RBI and FMEA ? And where can I find more details on the DTAA ? Thank you! – Jay S. Jan 1 '16 at 3:11
  • DTAA copy would be available on IRS website in US and income tax.gov.in in India. – Dheer Jan 1 '16 at 4:22

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