NRI Sells Bangalore Property for Rs 2.63 Crore, Wins Partial Tax Relief from ITAT
In a recent tax case in Bangalore, Mr. Nandi, an NRI originally from Hosur Road, faced significant challenges after selling his property for Rs 2.63 crore. He reported a long-term capital gain (LTCG) of Rs 16.33 lakh in his Income Tax Return (ITR) for the assessment year 2020-21. However, the Income Tax Department disputed his claims for various expenses related to the property, which he believed should reduce his taxable income. The department's denial of these expenses led to an increase in his taxable income from Rs 37.09 lakh to Rs 76 lakh, prompting Mr. Nandi to seek legal recourse. After an unsuccessful appeal to the Dispute Resolution Panel, Mr. Nandi turned to the Income Tax Appellate Tribunal (ITAT) in Bangalore, where he was represented by Chartered Accountant P R Suresh. The ITAT, on May 20, 2026, provided partial relief by allowing some of Mr. Nandi's expense claims. This ruling is particularly significant for NRIs selling property in India, as it emphasizes the importance of accurate documentation and tax filing. The ITAT's decision highlighted that legitimate costs associated with property acquisition and transfer, such as home loan interest, maintenance deposits, and travel expenses, can substantially reduce capital gains tax liabilities. The tribunal ruled that expenses like the maintenance deposit and utility deposits should be considered part of the property's acquisition cost, as they are necessary for securing possession of the property. Furthermore, the ITAT acknowledged the validity of Mr. Nandi's home loan interest claim, aligning with previous court rulings. This case serves as a reminder for NRIs to maintain meticulous records and understand the nuances of tax regulations in India, especially when navigating complex property transactions.
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