When I move to the UK, can I still get Section 54 benefits?

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When I move to the UK, can I still get Section 54 benefits?

Right now, I work for an MNC. In August 2023, I moved to the UK from Bengaluru. I bought a house with the money I made when I sold my 2010 startup investment in April 2023 so I could take advantage of tax benefits. Am I still eligible for this tax exemption, or will I lose the benefit since I have moved to the UK? 

From your query, I assume that you made an investment in equity shares of an unlisted company, which you sold in April 2023. Notwithstanding the determination of whether TDS provisions would have been applicable upon sale of equity shares of the company, capital gains derived from the sale would have been taxable at 20% (plus applicable surcharge and cess) along with indexation benefit.

Since you left India last August for employment in the UK, you would be treated as a non-resident under Indian tax laws. Therefore, for 2023–24, capital gains derived from the sale of unlisted company shares would be subject to tax at 10% (plus applicable surcharge and cess) without indexation benefit.

I assume you had invested in a residential house with the intention to claim exemption from capital gains tax on sale as per section 54F, and you were able to satisfy the applicable conditions, such as investment up to net consideration amount, not owning more than one house property at the time of sale, etc. There is no bar on non-residents to claim capital gains tax exemption benefit as per section 54F. Resident and non-resident taxpayers are both equally eligible.

Besides, irrespective of the differential tax rates between a resident and a non-resident for capital gains derived from the sale of unlisted shares, there is no need to pay any tax (by way of advance or self-assessment tax) in India since you would be claiming tax exemption as per Section 54F.

You may also obtain professional advice on whether to opt for the present remittance-based taxation in the UK so that the capital gains tax exemption benefit in India does not effectively get nullified because of tax payment obligations in the UK on the capital gains derived from such a sale.


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Ahmed Mainul

My name is Ahmed Mainul Mondal, I'm the founder of the hospitality career profile website. I'm writing blogs and news posts as per user preferences.

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