Dear experts,
I sold my flat in India in 2022. The capital gains tax was calculated and the buyer paid the price less the tax deducted at source (TDS). (The buyer pays that directly to the Indian revenue service.)
In my 2022 taxes, do I report the sale as a regular sale with form 8949 and calculate the capital gains. And then also report the TDS as foreign tax credit (to get benefit from the double-taxation treaty between India-US)?
The complication is that in filing the India tax return in 2023 (for the 2022 FY), the house's valuation and indexation is taken into account and there is a lower actual capital gains calculation and I will receive a tax refund in India as a result of this. Does this figure get reported in the US 2023 return, or should I incorporate the correction in the 2022 return itself?
Thank you!
