Inheritance – Savies Aadvisors

About This Case

The subject matter involved the inheritance and subsequent sale of immovable property in India, owned by four US tax residents. The case involved filing for a lower tax deduction certificate, remittance of sale proceeds, claiming foreign tax credit under the Double Taxation Avoidance Agreement (DTAA) between India and the USA, and completing FBAR filings in the US.

Law Income Tax Act and the Foreign Exchange Management Act

Time Frame2 Months

AdvisorSaurabh Arora

Challenge

The property was inherited intestate. Additionally, one of the beneficiaries opted to renounce their share, necessitating the preparation of a deed of renunciation/release.
Evaluating the holding period required for the asset to qualify as a long-term capital asset when inherited.
Calculating capital gains tax in accordance with both Indian and US Tax Laws.

Our Process

1. Effective Communication

We managed communication across three different time zones, accommodating the US tax residents based in various cities.

2. Step-by-Step Approach

We meticulously planned and executed each step of the transaction, including filing PAN applications, opening NRO bank accounts, preparing necessary Power of Attorneys (as only one seller could travel to India), and submitting online applications for a lower tax deduction certificate.

3. Continued and Extended Support

We reviewed the Step-Up basis for inherited properties as per US Tax Law. A valuation was carried out to determine the market value of the inherited property as on the date of death, assisting our US clients in accurately filing and claiming the correct basis for capital gains tax.