To:
The Honorable Finance Minister,
Government of India,
New Delhi

Respected Madam,

On behalf of the Indian diaspora in North America, we, the undersigned representatives of the Federation of Kerala Association of North America (FOKANA) -oldest and largest umbrella organization for North American Malayalees, respectfully bring this petition to your attention. It highlights concerns regarding the recent amendments to the taxation of capital gains from real estate introduced in the Finance Act, 2024.

This petition is supported by signatures from NRIs worldwide, reflecting the far-reaching apprehensions these changes have caused. Below, we detail the key challenges and propose actionable solutions.

 
Key Challenges

Real Estate Losing NRI Appeal:

India's real estate market has historically been an attractive investment for NRIs. However, the new tax policies significantly diminish this appeal, deterring investments and potentially reducing vital capital inflows that have long supported the sector's growth.

Unfair Tax Burden:
The increased tax rates for NRIs create an uneven financial strain compared to resident Indians. This inequity undermines the sense of fairness and discourages continued investments in India.

Complex Compliance Procedures:
The introduction of additional and complicated filing requirements adds financial and procedural burdens on NRIs. For small and mid-level investors, these administrative challenges can be a significant deterrent.

Loss of Inflation Adjustment (Indexation):
The removal of indexation benefits inflates the taxable amount, as it disregards the impact of inflation on long-term investments. This results in disproportionately higher tax liabilities for NRIs who rely on these benefits to offset long-term holding costs.
 
Proposed Solutions

Reinstate Inflation Adjustment Benefits:
Bring back indexation benefits for long-term capital gains to ensure NRIs are not unduly penalized for inflation’s impact on real estate investments.

Simplify Compliance Processes:
Introduce streamlined filing and compliance mechanisms tailored for NRIs, reducing the procedural complexity and administrative costs associated with the new tax policies.

Promote Fair Taxation:
Align NRI tax rates with those applicable to resident Indians to foster equitable treatment and encourage sustained investments in India.

Collaborate with Diaspora Organizations:
Engage with diaspora-focused organizations, such as FOKANA, to understand the unique challenges NRIs face and design policies that reflect their needs while supporting India’s long-term economic objectives.
 
Conclusion

The Indian diaspora has consistently demonstrated its unwavering commitment to India’s progress through significant contributions in the form of remittances, philanthropic efforts, and investments. However, the recent changes in taxation policy have created uncertainty and concern within our community, threatening to erode these vital ties.

We earnestly request your esteemed office to reassess these amendments and adopt measures that ensure fairness, encourage continued NRI investments, and strengthen the bond between India and its diaspora.

This petition, supported by signatures from NRIs globally, underscores the collective sentiment urging a reconsideration of these policies.

Yours sincerely,

Sajimon Antony

President: Federation of Kerala Association in North America (FOKANA).

NB:

Copying this to Chief Minister of Kerala, Members of Parliament, Leader of the Opposition in India and Leader of the opposition in Kerala.