Congress Lok Sabha MP and general-secretary (organisation) K.C. Venugopal on Friday wrote to Union finance minister Nirmala Sitharaman flagging concern among NRIs (non-resident Indians) over the recent changes in the taxation of capital gains on real estate.
He urged the minister to extend the same tax benefits to NRIs in the upcoming Budget as have been offered to other citizens.
There is a pressing concern among the NRI community regarding the recent changes in the taxation of capital gains on real estate as introduced in the Finance Act (2024), Venugopal said in his letter to Sitharaman.
"The provision allowing taxpayers to choose between 20 per cent tax with indexation or 12.5 per cent tax without indexation for properties acquired before 23rd July 2024 is a commendable step towards providing relief to resident taxpayers," he said.
"However, it has been observed that this option has not been extended to NRIs, thereby denying them the benefit of indexation, which is crucial in accounting for inflationary effects on long-term real estate investments," he said.
This differential tax treatment places NRIs at a significant disadvantage and creates an inequitable tax regime, Venugopal pointed out.
"NRIs contribute significantly to India's economy through remittances, investments, and their strong economic ties with the country. Given their vital role, it is only fair that they receive similar tax treatment as resident taxpayers.
"In light of the above, I urge your esteemed office to kindly examine this matter and consider extending the same tax benefits to NRIs in the upcoming Union Budget 2025," he said.
A rectification of this disparity would not only ensure fairness but also reinforce India's commitment to treating its global diaspora equitably, Venugopal said.
In a post on X, he said in last year's Budget, the Centre introduced the indexation requirement in the capital gains from real estate. "After criticism from all quarters, they gave taxpayers the option to choose between different tax slabs with or without indexation. Unfortunately, this was not extended to NRI taxpayers," he said, pointing out that this has resulted in them being unequal for the same type of activity.
Therefore, Venugopal said, he has written to the finance minister urging for complete parity in taxation on capital gains from real estate.
