POSTED BY June 6, 2014 12:00 pm NO COMMENTSON
My friend is NRI for last 16 years. He never had any income in India. Therefore he has not filed any tax return. In 2004 he booked one flat for Rs.40 Lakhs. Construction-linked payments were made from his NRE/NRO a/cs average Rs.8 Lakhs for 5 years. Before taking the possession, he sold this booking to a resident buyer for 42 Lakhs in 2009.
How this gain of Rs 2 Lakhs will be treated ? Will it be Long-term Capital Gain OR Short-term Capital Gain OR Income from Other Sources !
No TDS has been deducted by the buyer. Nor he filed any tax return assuming that indexation factor and exchange loss will be adjusted in the cost price which will result in loss in the transaction. If taxable, can he file return now. What penalties he can face or buyer can face.