NRI Property Sale: Claim Travel Costs, Save ₹1.5L Tax

If you're an NRI selling property in India, your airfare and hotel costs for the trip can be deducted from capital gains before tax is calculated. An income tax tribunal just confirmed this is legal.

Here's what happened: India's Income Tax Appellate Tribunal (ITAT), Bengaluru bench, ruled that NRIs can deduct airfare and accommodation costs from capital gains when selling Indian property, provided expenses were solely for the transaction.. These costs qualify as 'cost of transfer' under the Income Tax Act — a legitimate deduction that reduces taxable capital gains before the 20% long-term capital gains tax rate is applied.. The ruling reinforces existing provisions of the Income Tax Act that allow all expenses 'wholly and exclusively' connected to a property sale to be deducted, including brokerage, legal fees, and now confirmed travel costs..

What you should do: Save every document from your India trip — boarding passes, hotel invoices, taxi receipts, and stamp-duty challans — as the tax officer will demand proof that the visit was solely for the property deal.. Ask your CA to calculate the capital gains after deducting verified travel and accommodation costs under 'cost of transfer', alongside brokerage and legal fees, to arrive at the correct lower taxable amount.. If you filed an ITR for a recent property sale WITHOUT claiming these travel costs, check with a tax professional whether a revised return can be filed within the permissible window to claim the refund..

Book your India trip using a separate booking reference when it's specifically for the property sale — mixing it with a family holiday trip can give the assessing officer grounds to disallow the entire deduction.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.