Selling property in India and repatriation of money

Lately, many non-residents Indians (NRIs), especially from North America and Europe, are coming to India to sell their property. Holding on to real estate in India and maintaining it is not an easy task. Depending on relatives and friends for long is also not feasible.

After selling the property, the next challenge is to remit the money back to the country of residence. Though it may sound complicated, but in reality it is not.

Taxation

If NRIs sell property after three years from the date of purchase, they are liable for long-term capital gains (LTCG) tax of 20%. The gains are calculated as the difference between sale value and indexed cost of purchase. Indexed cost of purchase is the cost of purchase adjusted to inflation. Calculation of indexed cost of purchase can be done through online calculators.

In case of inherited property, the date and cost of purchase for purposes of computing the period of holding as well as cost of purchase is taken to be the date and cost to the original owner. While computing LTCG, the cost to the previous owner (the person from whom the property is inherited) would be considered as the cost of purchase. NRIs are subject to a tax deducted at source (TDS) of 20% on LTCG. But there are certain instances wherein NRIs can get a waiver on TDS—say, if the NRI plans to re-invest the capital gains in another property or in tax-exempt bonds.

Read more: Mint

The growth potential of smaller cities

India has witnessed strong economic growth in the last decade, primarily on account of economic reforms that ushered in an era of liberalization and provided for increased participation of the private sector.

The opening up of the economy for investment was instrumental in spurring broad-based fundamental growth, which was largely concentrated in the leading metropolitan hubs of the country such as the National Capital Region (NCR), Mumbai, Bangalore and Kolkata. These cities witnessed rapid growth and a spurt in urbanization that fuelled the inflow of massive populations from the countryside and smaller towns, resulting in significant pressures on their infrastructure and sustainability.

As the decade progressed, much of the country’s organized real estate development activity mushroomed in these leading cities and, eventually, peaked to a point of filtering down to smaller cities and towns, largely led by the significant cost arbitrage offered by these smaller centres.

As the tier-I cities got exposed to impediments such as slow and rather uneven development of urban infrastructure, rapidly increasing operational costs, land paucity amid escalating land values and exorbitant real estate prices, the focus shifted towards the so called “emerging hubs” or the tier-II and tier-III cities of the country.

Read more: Mint

Economy

Inflation to come under greater control in coming months: PM

Inflation will come under greater control in the coming months and will provide greater space to the Reserve Bank to pursue pro-growth policies, Prime Minister Manmohan Singh said today.

Inflation will come under greater control in the coming months and will provide greater space to the Reserve Bank to pursue pro-growth policies, Prime Minister Manmohan Singh said today.

Inflation will come under greater control in the coming months and will provide greater space to the Reserve Bank to pursue pro-growth policies, Prime Minister Manmohan Singh said today.

“In the coming months, you will see inflation coming under greater control and the space for growth promoting activities also increasing,” he told reporters on his way back from his two nation tour of Japan and Thailand.

The Prime Minister was asked whether in the growth versus inflation dynamics RBI has been left behind since Finance Minister P Chidambaram has made it clear that he would like to walk alone if the RBI does not listen.

“Monetary policy of the country is decided by the RBI and I respect the judgement of RBI. But this is also an evolving process. As we get control over inflation, there is more space available to pursue pro-growth policies,” he said.

Read more: The Economic Times

India can still grow at 7-8% or even more: Subbarao

Enumerating the challenges faced by the Indian economy, Reserve Bank of India (RBI) governor Duvvuri Subbarao today said the ‘India Growth Story’ was still intact. Speaking at the 12th RL Sanghvi Endowment AMA Lecture on Economics here, he added that India could still grow by seven-eight per cent or even in double digits annually.

In his lecture on ‘India’s Macroeconomic Challenges: Reserve Bank Perspective’, he said there were three challenges that the Indian economy faced.

“These include managing inflation dynamics, mitigating vulnerability of external trade and managing the political economy of fiscal consolidation. In these, the big challenge is the third one, since it is difficult in a democracy like India to pursue fiscal consolidation. However, I believe the India growth story is intact and we can still grow at seven-eight per cent or even double digits. We have all the ingredients. But if we don’t do it rightly, we may squander the opportunity,” he said.

Subbarao said the current account deficit (CAD) was a major concern in terms of quantum, quality and financing. “CAD should be ideally financed through foreign direct investments (FDI) but we are not doing so. Moreover, the solution for CAD is to increase exports and seeing that imports go slower than exports,” he said.

Subbarao also warned of upside risks to inflation, denting hopes of further rate cuts.  Annual consumer price inflation slowed to 9.39 per cent in April, but was still significantly higher than the wholesale price index inflation at 4.89 per cent.

Read more: Business Standard

RBI to have more space for pro-growth policies, says PM

In what could be a clear signal to the Reserve Bank of India (RBI) ahead of its mid-quarter monetary policy on June 17, Prime Minister Manmohan Singh said today he believed the central bank would have more space available to pursue pro-growth policies, as inflation was coming under greater control.

Asked whether RBI was behind the curve in the growth versus inflation dynamics, Singh said he “respects the judgment of the central bank, which decides the monetary policy. But this is an evolving process. In the coming months, you will see inflation come under greater control and the space for growth-promotion activities will also increase”. This is the first time that the Prime Minister has publicly expressed his views on the issue.

The Prime Minister, who was speaking to reporters on his way back from his five-day tour of Japan and Thailand, did not directly comment when asked about his opinion on the finance minister’s observation a few months earlier that he would walk alone on the growth path if others didn’t want to see the obvious. The central bank has been moving cautiously on rate cut due to perceived inflationary risks. In its last review, RBI had cut the key policy rate by 0.25 per cent.

Singh, who was in a visibly good mood after a reasonably successful tour, answered a host of questions ranging from the Indian Premier League cricket scandal to the perception of a rift between him and Congress President Sonia Gandhi.

Read more: Business Standard

Rupee could weaken further on dollar rally: Jamal Mecklai, Mecklai Financial Services

In an interview with ET Now, Jamal Mecklai, CEO, Mecklai Financial Services, shares his views on the rupee. Excerpts:

ET Now: In fact, it is a 16-month low that we are seeing for the rupee. What is causing the relentless weakness so to say today?

Jamal Mecklai: Actually the situation is quite sensitive and the rupee has weakened today despite the fact that the dollar weakened overseas. The primary force that had been driving the rupee down in the previous 10 days or so was dollar strength and even though that has reversed, the rupee has weakened further. My only thinking is sentiment is very delicate and Dr. Subbarao’s comment yesterday saying things are pretty bad got you to summarise what he said. Perhaps that is what made people a little more nervous. It is a difficult situation because dollar is correcting overseas and that should give us a little breadth, but it has not done that. So when the dollar rally starts up again, the rupee could weaken further. My sense though is that we may see RBI coming in or maybe it may come in on Monday if the rupee remains weak.

Read more: The Economic Times

Commodities

Gold falls 1.6 pc, notches second sharp monthly loss

Gold fell almost 2 percent on Friday after U.S. data showing low inflation and improving consumer confidence dampened investor interest, with bullion notching sharp losses for a second consecutive month.

A combination of decreasing fund interest, option expiration and squaring of books after investors covered short positions also sent open interest in U.S. gold futures to its lowest in almost four years, traders said.

Data showing a six-year high in consumer sentiment weighed on gold, a traditional safe haven.

“The metals were already under pressure going into the end of the month as many people have a lot of short positions outstanding, and the consumer confidence data just added fuel to selling,” said Carlos Perez-Santalla at brokerage Marex Spectron.

Spot gold fell 1.6 percent to $1,390.80 an ounce by 3:17 p.m. EDT (1917 GMT), its biggest one-day loss in two weeks.

Read more: The Economic Times

 

Ireo Waterfront, located in Ludhiana, Punjab, is a 500 acre township

Ireo Waterfront, located in Ludhiana, Punjab, is a 500 acre township

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