When a Canadian resident sells property in India, several tax implications and regulations must be considered both in India and Canada.

In India, the primary concern is the taxation of capital gains. If the property has been held for more than 24 months, it is considered a long-term capital asset, and the gains are subject to a long-term capital gains tax at a rate of 20% with indexation benefits. If the property is sold within 24 months, it is treated as a short-term capital asset, and the gains are taxed at the individual’s applicable income tax slab rates. The buyer is required to deduct Tax Deducted at Source (TDS) at a rate of 20.6% for long-term capital gains and 30.9% for short-term capital gains​.

NRIs can claim exemptions under Sections 54 and 54EC of the Indian Income Tax Act to reduce their tax liability. Section 54 allows for exemption on long-term capital gains if the proceeds are reinvested in another residential property within a stipulated time frame. Section 54EC provides exemption if the gains are invested in specified bonds​

NRIs should ensure compliance with both Indian and Canadian tax regulations to avoid penalties and make use of available exemptions. Consulting with real estate attorney India is advisable to navigate the complexities of cross-border taxation efficiently.