Why the same sale produces two different gains
India and the UK both have a claim on the gain, but they measure it differently — and that's where most of the confusion comes from.
India computes the gain in rupees. It takes your cost of acquisition (with indexation where the rules still allow), adds the cost of any improvements, and subtracts that from the sale consideration. The buyer deducts TDS, and the gain goes on your Indian return.
The UK, because you're resident there, taxes your worldwide gains — and rebuilds the gain in sterling. Your purchase cost is converted to pounds at the exchange rate on the day you bought; your proceeds at the rate on the day you sold. Because the rupee moved against the pound between those dates, the sterling gain is almost never the rupee gain converted at one rate. A property can even show a larger gain in sterling than in rupees, purely from currency movement.
Neither figure is "wrong". They're two correct answers to two differently-worded questions, and your UK accountant needs the India one in front of them to reconcile the two.
How double tax is actually relieved
Being taxed by both countries doesn't mean paying full tax twice. The India-UK DTAA and the UK's own foreign tax credit rules stop that.
Under the treaty, the gain on Indian immovable property can be taxed in India (Article 14), and Article 24 then requires the UK to give credit for the Indian tax against the UK tax on the same gain. So your UK accountant computes the UK gain in sterling, works out the UK tax, and sets the Indian tax already paid against it — you broadly pay the higher of the two, not the sum.
This only works if you can prove the Indian tax. A UK foreign tax credit claim has to be evidenced, which is why the India-tax-paid certificate is the linchpin. Without it, the credit can be questioned and you risk paying twice in fact even though the treaty says you shouldn't.
A worked example: Raj in Manchester sells a Pune flat
Raj, UK-resident in Manchester, sells a flat in Pune he bought in 2014. India computes a long-term gain in rupees under Section 112; the buyer deducts TDS, and Raj's Indian return reports the gain and settles the balance of Indian tax.
For the UK, the same flat has to be reported in sterling. The 2014 purchase cost is converted at the 2014 exchange rate and the 2025 proceeds at the 2025 rate. Because the rupee weakened against the pound over those years, Raj's sterling gain comes out different from the rupee gain — so his UK accountant can't just convert the Indian number.
We give Raj's UK accountant the Indian computation (cost, dates, gain), confirm the TDS and the final Indian tax, and issue the India-tax-paid certificate. The UK accountant computes the UK gain in pounds and claims credit for the Indian tax under the treaty.
| Step | India side (TrustNRI) | UK side (Raj's accountant) |
|---|---|---|
| Gain | Computed in INR, Section 112 | Recomputed in GBP at 2014 / 2025 rates |
| Tax | TDS + Indian return filed | UK CGT, minus credit for Indian tax |
| Proof | India-tax-paid certificate issued | Certificate used for the FTC claim |
What we hand over, and what we don't
Our deliverable is a self-contained India-side pack: the capital-gains computation with cost basis and dates, the TDS position, the filed Indian return, and the India-tax-paid certificate that evidences the credit. Where it helps, we add an indicative GBP figure of the Indian gain with the exchange basis stated — but the binding UK computation is your accountant's, done in sterling under UK rules.
If the sale hasn't happened yet, we also check whether a lower-deduction certificate (Form 13, under Section 197) is worth applying for, so TDS is closer to the real Indian tax rather than the higher default — which avoids a large refund sitting in India while you wait.
We don't prepare or file your UK Self Assessment, compute the UK gain, or act as your UK tax agent. We make the India side complete and provable so your UK accountant can claim the treaty credit without friction.