The buyer deducted tax on my whole sale price, so is that correct?
It is how the deduction is designed to work. When an NRI sells Indian property the buyer must deduct tax computed on the whole sale consideration, not on the gain. On a flat held for many years the consideration is large and the real gain is a fraction of it, so the deduction routinely exceeds the tax actually due. That excess is not lost, but it is not yours to hold either. It sits with the Indian department until a return recovers it. The way to avoid the gap in the first place is a lower-deduction certificate obtained before closing, which sets the deduction at the real liability.
How do I get back tax deducted on the sale price of my flat?
By filing the Indian return for the year of sale and claiming it there. The return is where the gain is computed properly, as consideration less the cost taken into account, and the tax on that gain is then set against what the buyer deducted. Any excess is refunded from there. The practical work is in the supporting material rather than the form: the cost history, the documents evidencing it, and the deduction records from the buyer. Assemble those before filing. The recovery route is reliable, but it is slow compared with having the deduction set correctly before closing.
Do I have to file an Indian return if tax was already deducted?
If you want the excess back, yes. The deduction is not a final settlement of the liability. It is computed on the consideration while the tax is computed on the gain, so the two figures rarely match, and the difference is only resolved on a return. Filing is also what produces a record of the gain you can rely on elsewhere, including where another country taxes the same disposal. Treating the deduction as the end of the matter leaves money with the Indian department and leaves your position on the sale undocumented.
My bank will not remit the sale proceeds, so what is missing?
Usually the certification the remittance itself requires. Reducing or recovering the deduction and moving the money out are two separate steps with two separate documents, and a bank will not transfer the proceeds until the remittance has been certified. People are caught by this after the tax side is settled, because nothing in the sale process flags it. Plan it as part of the transaction rather than afterwards. Find out what the bank will ask for, and prepare the certification alongside the sale documents, so the funds are not sitting in an Indian account waiting on paperwork.
Can I still apply for a lower-deduction certificate after closing?
The certificate works before closing, because its function is to set the deduction the buyer makes. Once the deduction has been made the route changes: the money sits with the Indian department, and a return is what recovers it. That is a slower path to the same place, which is why the timing of the application matters more than almost anything else in these transactions. If a sale is in prospect rather than completed, the certificate is still the thing to pursue. If it has completed, the work shifts to the return and to the remittance certification.
What filings follow the sale of a flat I inherited in India?
The same return for the year of sale, with more work behind the cost figure. Computing the gain requires a cost taken into account, and on an inherited property that history runs back through the person you inherited from, so old purchase papers and improvement records matter. The buyer's deduction still applies to the whole consideration regardless of how you came to own the flat. So the filing set is the return that computes the gain and reclaims the excess, plus the certification your bank needs before the proceeds can be remitted.
Can I set up a trust that works in two countries?
You can, but the two systems classify and tax trusts differently enough that a structure which is efficient in one is often a reporting problem in the other — a Canadian family trust with a US beneficiary, or a US revocable trust holding Canadian property, are the classic pairs. Canada's twenty-one-year deemed disposition, the US grantor rules and each country's reporting have to be read together, before drafting rather than after. See cross-border wills and trusts.
What is Schedule FA and who has to complete it?
It is the foreign asset disclosure in an Indian return, and the trigger is residential status rather than income: a resident discloses foreign bank accounts, custodial and equity holdings, foreign life insurance with a cash value, immovable property and other assets held at any time in the year, plus any beneficial interest. A non-resident does not. The obligation is disclosure-based, so it applies to an account that earned nothing, and the penalties under the black-money legislation are what make it worth getting right. See Schedule FA reporting.
