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Vietnam

Selling Indian property while you are a Vietnamese tax resident

India's tax on the gain is far larger than Vietnam's tax on the price, so the credit means India's 12.5% is what you pay.

You are selling a property in India, and you are a tax resident of Vietnam. Both countries tax property, so the worry is a double bill. In practice the outcome is simpler than it looks: India taxes the gain at a rate far higher than Vietnam's small tax on the sale price, so the credit for the India tax wipes out the Vietnamese charge, and India's tax is really the only cost. Here is how the two sides fit, and the Indian point to get right.
Last reviewed: 26 July 20266 min readReviewed by Preetesh Maloo, CA

The short answer

India taxes the whole gain on your Indian property at 12.5% without indexation, with the buyer deducting TDS under Section 195. Vietnam taxes a real-estate sale at 2% of the sale price. Because India's 12.5% of the gain is almost always much larger than Vietnam's 2% of the price, Vietnam's credit for the India tax removes the Vietnamese charge, so India's 12.5% is the real and only cost. As an NRI, note that you get no indexation and no grandfathering on the Indian gain, unlike a resident Indian seller, so the flat 12.5% applies whatever the age of the property.

References on this page

  • India taxes the full gain: LTCG 12.5% without indexation (from 23 July 2024), no grandfathering or forex relief for NRIs, TDS under Section 195
  • Vietnam taxes a real-estate sale at 2% of the sale price, with a credit for the India tax
  • India's 12.5% of the gain almost always exceeds Vietnam's 2% of the price, so the credit removes the Vietnamese charge
  • The 20%-with-indexation grandfathering is for resident Indians only; an NRI is locked into 12.5% without indexation

The India side: the whole gain at 12.5%

India taxes the full capital gain from your original cost. For long-term property sold on or after 23 July 2024, the rate is 12.5% without indexation, and as an NRI you get neither the resident option of 20% with indexation nor any currency relief for the rupee's fall, so the whole rupee gain is taxed. The buyer must deduct TDS under Section 195 on the sale, plus surcharge and cess, not the small 1% that applies to a resident seller, so a lower-deduction certificate is worth getting and any excess is reclaimed by filing an Indian return.

The point NRIs get wrong: the choice residents have, 20% with indexation or 12.5% without, on property bought before 23 July 2024, is for resident individuals only. An NRI does not get it and pays the flat 12.5% without indexation, whatever the age of the property.

Vietnam's tax is smaller, so the credit clears it

Vietnam taxes a real-estate sale by an individual at 2% of the sale price. Note that this is 2% of the whole price, not of the gain, so it is charged on the full sale value. Even so, it is almost always far smaller than India's tax, because India charges 12.5% of your gain, and on a property that has risen in value the gain-based 12.5% comfortably exceeds 2% of the price.

Because India, as the country where the property sits, has the primary right to tax the gain, Vietnam gives a credit for the India tax against its own charge. Since the India tax is the larger of the two, that credit wipes out the Vietnamese 2% entirely, and Vietnam collects nothing extra. So the practical outcome is clean: India's 12.5% is the real and only cost of the sale, and the Vietnamese tax, while it technically applies, is fully relieved by the credit. A practising CA computes the Indian gain, gets the lower-deduction certificate so the buyer withholds on the real gain, and gives your Vietnamese accountant the India-tax-paid detail for the credit.

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What's involved

What the CA actually does

  1. 1

    We compute the real Indian gain

    We work the gain from your original cost with the correct 12.5% NRI treatment, so the Indian tax is right and not overpaid.

  2. 2

    We cut the TDS to the real tax

    We get a lower-deduction certificate so the buyer withholds on your actual gain, not the gross, and reclaim any excess on your return.

  3. 3

    We support the Vietnamese credit

    We give your Vietnamese accountant the India-tax-paid detail so the credit removes the Vietnamese 2% charge.

  4. 4

    We keep the India side clean

    We file the Indian return and reconcile the TDS, so the whole sale is in order across both countries.

What to have ready

Documents you'll typically need

  • The original purchase deed and rupee cost
  • The sale agreement and the buyer's TDS
  • The property's value and holding period
  • Your PAN and Vietnamese tax details

Frequently asked questions

Common questions

Selling Indian property from Vietnam?

Tell us the figures. A practising CA will size the Indian tax and support the Vietnamese credit on a free call, no obligation.

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