Some US-based NRIs are under the impression that a new information-sharing protocol might bring their assets, financial details and capital market investments in India under the scanner of US tax authorities. This is the reason why many of them are considering selling their properties in India, even at discounted rates as the Indian real estate market is going through a low phase.
The protocol under question is called the US Foreign Account Tax Compliance Act (FATCA), which was recently agreed to be implemented by both India and the US. The law aims to make sure that tax is paid on the income generated from residents' overseas wealth. Under the agreement, both governments would be sharing information about their respective citizens that have assets in each other's countries.
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