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Mon, 26-Feb-2024

NRI SERVICES

NRI Investment in India Consultancy

Its substantial industrial growth over the last two decades has made it increasingly appealing for foreign direct investments (FDI). Therefore, NRIs now are considering India as a viable destination to earn profits by investing in India. The Indian market, known for its diverse investment options such as Real Estate, equities, mutual funds, fixed deposits, and debt funds, offers a promising avenue for wealth creation.

It’s common for NRIs to move abroad and be concerned about managing their capital, banking services, and investments back in their home country. We at our firm help you to choose the financial products matching your portfolio and goals by providing timely advice and suggesting right product for investment.

We offer the following services:

  • Advisory on tax implications of various Investing options like equity-linked savings schemes (ELSS), unit-linked insurance plans (ULIPs), tax-free bonds and real estate investment trusts (REITs) Mutual funds, NPS, FDs, and PPF etc.
  • Disclosure requirements of FATCA/ FINCEN/ CRS/ WDF
  • Recovery of unclaimed shares/ FDRs

NRI Compliances & Disclosures

We offer various financial, legal and other services to Non-Resident Indians, who are individuals of Indian origin living abroad. These service providers are subject to specific disclosures and compliances to ensure transparency, protect the interests of their clients, and adhere to regulatory requirements.

arrow FATCA/ CRS

The US government introduced FATCA or Foreign Account Tax Compliance Act in 2009. The primary goal of this act is to prevent US persons from parking their wealth outside the US to avoid taxation. The US government has signed agreements with many countries, which makes it mandatory for the other countries to share details of such investments by US nationals. The Indian government agreed to implement the FATCA in 2015 by way of inter-government agreement between India and USA.
Any NRI living in USA and investing in Indian assets will have to adhere to the Foreign Account Tax Compliance Act (FATCA) laws. These legislations require financial institutions to declare details of accounts held by US taxpayers. FATCA also requires a self-declaration from NRIs living in the USA while making investments in India.
The Indian government made it mandatory for all NRI investors from the US to self-declare FATCA compliance through Form 61B, as per Rules 114F and 114H of the Income Tax Rules, 1962. There are alternate procedures available as well.
We can help with meeting end to end requirements for FATCA and CRS disclosures.

arrow Worldwide Disclosure Facility (WDF)
is being used to disclose a UK tax liability that relates wholly or in part to an offshore issue.
WDF does not offer such favourable terms but it is still in your benefit to disclose as soon as possible to avoid hefty penalties. It can be used by any person who needs to disclose a UK tax liability in relation to an offshore income or gain. The same applies for all tax years up to and including 2023/24

Lower Rates of TDS

Lower/ NIL TDS for NRI Selling Property In India In the case of NRI, OCI and Foreign Resident, on sale of property in India, TDS provisions have been specified u/s 195 of Income Tax Act.

As per this section rate of TDS is 20% of sale consideration if the property is long term capital assets or it is 30% of sale consideration if the property is short term capital assets.

As against such proposition under the law, generally on all property sale transactions actual tax liability of the seller is lesser than the proposed TDS amount. To overcome blockage of funds, with tax department, income tax law provide for lower deduction TDS certificate also known as TDS exemption certificate u/s 197 of the Act. Such certificate can be obtained by way online filing of form No. 13 to the jurisdictional officer along with requisite documents.

We provide services to take Lower rate of TDS certificate from income tax department. It avoids hassles of getting huge refunds.

Our services

  • Preparation & filling of application for lower TDS.
  • Advisory services on Lower TDS rate.
  • Services required by NRI in case of he is Buyer of Property.

Other miscellaneous services.

15CA-15CB FORMS FOR REMITTANCES

CA Certificates like 15CA and 15CB for Remittance of Funds Outside India We provide the support in filing the Form 15CA and Form 15CB which are both related to the process of remitting money to a non-resident or a foreign entity.

Form 15CA is a declaration of remittance, which is required to be furnished by the remitter (a person making a payment to a non-resident) to the authorized dealer bank (the bank through which the remittance is made) prior to making the payment. This form contains details such as the name and address of the remitter and the beneficiary, the purpose of remittance, the amount of remittance, and the tax deducted at source (TDS), if any.

Form 15CB is a certificate by a Chartered Accountant, which is required to be obtained by the remitter from a chartered accountant before making a payment to a non-resident. This form certifies that the payment is not chargeable to tax in India or that the tax has been deducted at the appropriate rate. It also confirms that the remittance is in accordance with the provisions of the Income Tax Act, 1961 and the Double Taxation Avoidance Agreement (DTAA) between India and the country of the non-resident.

Foreign Remittance Declaration Form A2 is a document used in India for the transfer of money abroad. It is a mandatory form that needs to be submitted to the authorised dealer (a bank or financial institution authorised by the Reserve Bank of India) for any outward remittance of foreign exchange.

For remittances outside India there is a mandatory requirement for filling form 15CA-15CB to income tax department.

At “Atul Mangal & co.’ we provide following services

  • Preparation of 15CA-15CB for remittances from India.
  • Consultancy on 15CA-15CB form
  • Help for Remittance between NRO to NRE A/c.
  • Help for Remittance between NRO to Overseas A/c.

Assistance in complying with the Foreign Exchange Management Act (FEMA) regulations related to foreign remittances. NRIs can repatriate up to USD 1 million per calendar year, provided they’ve paid the applicable income tax.

NRI Taxation Services

NRIs are individuals who are either citizens of India or Persons of Indian Origin (PIO) but are not Residents of India. 95% of NRIs have been maintaining residences, properties, investments, and businesses in India and therefore it becomes essential to understand the tax implications of the same as per Indian Tax laws. CA Atul Mangal & Co. have been the trusted partners for NRI tax planning services for more than two decades now with a focus on providing personalised solutions for our NRI & OCI clients to meet their financial goals.

Our team of experienced NRI tax consultants specialise in offering NRI tax advisory services to reduce your tax burden and ensure adherence to Indian tax regulations. Our expert guidance helps NRIs to navigate the complexities of tax structures for investments and businesses in India, providing advice on the most tax-efficient methods for remitting funds.

As we recognize the intricate nature of Indian tax regulations for Non-Resident Indians (NRIs), our team is dedicated to providing personalised and professional assistance to help you navigate these complexities, ensuring compliance with tax laws and enjoying peace of mind. Reach out to us today and let our expertise in NRI taxation services help you meet your taxation needs.

Benefits of our NRI Tax Planning Services

Our NRI Taxation services is dedicated to assisting non-resident Indians in achieving their financial objectives while ensuring compliance with tax regulations and optimizing tax benefits. Our services are tailored to provide a deep understanding of international tax laws, ultimately minimizing tax liabilities. By leveraging the expertise of our NRI tax consultants in India, clients can capitalize on exemptions and deductions.

  • Our NRI Taxation Services Includes
  • Filing of Income Tax Returns (ITRs) for individuals or businesses along with assistance in claiming Tax Refunds, if any.
  • Planning your taxes to minimize the tax liability in case of sale of property in India – Capital Gains accruing and arising from sale of property in India are taxable in India irrespective of the country you reside in. Our team of NRI specialized Tax experts work out a tailor-made solution as per your requirements and suitability to claim appropriate exemptions available under sections 54, 54F, 54EC etc.
  • Planning the date of Moving out of India / Moving back to India to minimize the tax liability
  • Avoiding Double Taxation – By pursuing DTAA relief between the two countries (Country of residence and country of source of Income), we assist NRIs in preventing double taxation.
  • Assistance in income tax scrutiny and assessment/audits
  • Advisory And Assistance For Remittances In and Out of India – Depending on the specific requirements of our NRI clients, we assist in sending money to India via an approved remittance channel to ensure accurate reporting since this is essential for the future repatriation of funds outside India with ease. NRIs can repatriate up to USD 1 million per calendar year, provided they’ve paid the applicable income tax.
  • Assistance in complying with the Foreign Exchange Management Act (FEMA) regulations related to foreign remittances along with the Certification services under FEMA/ Income Tax
  • Consultancy around Investment options for claiming around income tax deductions available under section 80. Some of the common investment options being: 1. Public Provident Fund 2. Life Insurance 3. Specified FDs 4. Repayment of Principal amount of Home Loan
  • We provide representation services related to Income Tax Authorities, CIT (A), and Appeals with respect to Income tax notices received by clients.
  • Tax optimization.
  • Advance tax planning.
  • Housing loan advice.
  • Investment planning.
  • Application of PAN CARD, TAN.
  • Filling of Income Tax Return.
  • Other allied services.

NRI Property Sale in India

Real estate market in India, particularly in growing cities, is one of the many financially rewarding investment opportunities for Resident Indians as well as NRIs. Many NRIs own residential and/or commercial properties in India for a variety of reasons, including investment. Re-investing or selling property in India for NRIs is not difficult but comes with certain rules and regulations which are different to that for a Resident Indian, making it complex. The complexity ranges from knowing the procedures, meeting the compliances, paying the correct and minimum taxes, bank account solution for receiving the money, repatriating the funds, following the regulations of RBI, FEMA PMLA and Income Tax Act and so on.

This results in a fair amount of confusion about implication for NRIs who want to sell/ purchase/ manage any house property that they may have in India. We at CA Atul Mangal & Co. specialize in offering NRI property sale services in India a complete solution to the NRIs and individuals from countries other than India, who want to sell their property in India.

Why choose us for Selling Property in India for NRI
• We can serve as the authorised representative for non-resident Indians (NRIs) when it comes to the registration procedure
• We can assist in getting the property transferred to the name of the NRIs (in case it is not in their name)
• We can aid in obtaining necessary paperwork, provide precise drafting and reviewing services, and diligently preserve crucial documents.
• We can provide the necessary support in opening the necessary Bank accounts
• We can assist the individuals buying the property from the NRI in meeting all the necessary compliance requirements


We also offer specialized solutions to specific situations like:

• Sale of property by an NRI to another
• Sale of property acquired by inheritance
• Sale of property received as a gift
• Sale of Agricultural land or farm house

arrow Computation of the Tax Liability
The capital gains from the sale of property by NRIs in India are liable to be taxed in India. The amount of tax depends upon the duration for which the asset has been held by the NRI.

  • If held for more 2 years, Long Term Capital Gain, taxed @20%
  • If held for 2 years or less, Short Term Capital Gain, taxed @slab rate
    based on NRI’s total income
    .

arrow Lower/ NIL TDS for NRI Selling Property In India
In the case of NRI, OCI and Foreign Resident, on sale of property in India,
TDS provisions have been specified u/s 195 of Income Tax Act.
As per this section rate of TDS is 20% of sale consideration if the property is long term capital assets or
it is 30% of sale consideration if the property is short term capital assets.
As against such proposition under the law, generally on all property sale transactions actual tax liability of the seller is lesser than the proposed TDS amount.
To overcome blockage of funds, with tax department, income tax law provide for lower deduction TDS certificate also known as TDS exemption certificate u/s 197 of the Act. Such certificate can be obtained by way online filing of form No. 13 to the jurisdictional officer along with requisite documents.

arrow Claiming a Refund of the TDS Deducted
In case an NRI is unable to receive a lower/ NIL TDS certificate, we can still minimize the tax by claiming a Refund. In order to claim a refund of the TDS which is deducted, an NRI has to file an income tax return in India. The tax liability of the NRI is computed and a refund is claimed for the excess of the TDS which is paid by the NRI during the financial year.


Tax Exemptions Options
Depending on the requirement and the financial goal of the individual, there are multiple exemption options available even to the NRIs to minimize their tax liability in case of NRI property sale in India:

Section 54
Under section 54, NRIs can claim an exemption on the Long-Term Capital Gain arising from sale of House Property in India. For claiming the same, the amount of capital gains accrued on such sale is to be put to one of the two purposes:

  • Purchase of another residential house one year before or two years after the sale of the house.
  • Construction of a new residential house within three years after
    the sale of the house.
  • The amount of capital gain which is invested will be exempted from
    capital gain.

    Section 54 EC
    Another exemption option to save taxes on the sale of property in India is by investing the capital gains amount into the bonds issued by the following entities within a period of 6 months from the sale of property in India:
  • Bonds issued by the National Highway Authority of India (NHAI)
  • Bonds issued by the Rural Electrification Corporation of India (REC)
  • Bonds issued by the Power Finance Corporation Ltd. (PFC)

These are redeemable after 5 years and must not be sold before the lapse of 5 years from the date of sale of the house property. The amount of capital gains which is invested in such bonds will be exempt from tax.

Section 54 F
The exemption under this section is available against Long Term capital gain accruing from sale of any capital asset other than a residential house property. For claiming the same, the NRI has to purchase a house property, within one year before the date of transfer or two years after the date of transfer or construct one house property within 3 years after the date of transfer of capital asset. Also, the property so purchased should be situated in India and not be sold within a period of 3 years of its purchase or construction.

Here the entire sale receipt is required to be invested.
If the entire sale receipt is invested then the capital gains are fully exempt otherwise the exemption is allowed proportionately.


arrow CA Certificates like 15CA and 15CB for Remittance of Funds Outside India

We provide the support in filing the Form 15CA and Form 15CB which are both related to the process of remitting money to a non-resident or a foreign entity.

Form 15CA is a declaration of remittance, which is required to be furnished by the remitter (a person making a payment to a non-resident) to the authorized dealer bank (the bank through which the remittance is made) prior to making the payment. This form contains details such as the name and address of the remitter and the beneficiary, the purpose of remittance, the amount of remittance, and the tax deducted at source (TDS), if any.
Form 15CB is a certificate by a Chartered Accountant, which is required to be obtained by the remitter from a chartered accountant before making a payment to a non-resident. This form certifies that the payment is not chargeable to tax in India or that the tax has been deducted at the appropriate rate. It also confirms that the remittance is in accordance with the provisions of the Income Tax Act, 1961 and the Double Taxation Avoidance Agreement (DTAA) between India and the country of the non-resident.

NRI Returning to India Consultancy

Indian Citizens go abroad for employment (Non-Resident Indians ‘NRI’). Many of them obtain foreign citizenship also (Person of Indian Origin ‘PIO’). Many of these NRIs, OCIs, PIOs or their children, due to their roots in India or various other reasons, plan to come back to India. Also, many foreign citizens come to India for business or employment also. In these circumstances, it is important for them to know and understand the Indian regulations with regard to Income Tax as well Foreign Exchange Laws.

We offer the following services:

  • Planning the date and month of return to India so as ensure minimum tax liability in the year of return (i.e. April to March)
  • Conversion of NRO & NRE Deposits into Resident Account
  • Conversion of Foreign Currency to Non- Resident (FCNR) A/c to Rupee Account or RFC A/c
  • Compliances regarding repatriation of assets to India
  • Procedure for re-designation of all Indian bank accounts
  • Opening of ‘Resident foreign currency’ (RFC) account
  • Compliance in respect of the Indian Income-tax Act, 1961 e.g. application for PAN in case you do not have a PAN.
  • Facilitate re-investment of sale proceeds of assets acquired outside India.
  • Plan tax liability in India

Assistance in Filing Return of Income

Estate Planning For NRI

An overwhelming majority of Resident Indians/ NRI still do not have a professionally written will and the actual numbers will be closer to 82%+.
They think they don’t need to do any sort of estate planning as they think
“Estate Planning” is for wealthy people”.

In India, millions of people die each year without any type of estate plan in place, and this forces their families into the court system, where they experience the high cost and time delay characteristic of Succession Certificate/ Probate proceedings. The challenges in estate planning are greater for NRIs since they are likely to have assets in more than one geographic location: India and the country of their residence.

What exactly is Estate Planning?

“Estate planning means having a plan to ensure that people or entities whom one wishes to pass on the estate receive them in the manner intended”. Estate planning typically attempts to eliminate uncertainties over the administration of a probate & maximize the value of the estate by reducing taxes and other expenses.”


arrow Estate Planning Drafting/ Redrafting/ Reviewing services

We can help you draft:

  • Individual Will
  • Couple Will
  • Family Trust Deed
  • Family settlement agreement
  • Trust deed for special child/ Minors


arrow Property Matters Drafting Services:

  • General POA
  • Special POA
  • Release Deed
  • Gift Deed


arrow Advisory On:

  • Gift compliances
  • Bereavement Advisory Services (Demise of a person without Will)
  • Succession Advisory Services for Business & Personal Assets

At our Firm, we understand that NRI taxation can be complex and confusing. That’s why we offer personalized services tailored to your specific needs and circumstances. Our team of experts has a deep understanding of NRI taxation laws and regulations, and we are committed to providing the highest level of service to our clients.

Double Taxation Avoidance Agreement Consultancy

Income can be subject to double taxation when it is taxed both in the country where it’s earned, often referred to as the ‘source country,’ and in the country where the person earning the income resides, known as the ‘residence country.’ For instance, consider a scenario where a Non-Resident Indian (NRI) resides in the USA but earns income in India. In such cases, the NRI is liable to pay taxes on their income both in the source country, India, and in their residence country, the USA.

Double Taxation Avoidance Agreement Double Taxation means the same income getting taxed twice in hands of same assesse. Any country taxes income on the basis of two rules i.e. Residence Rule & Source Rule. Double Taxation is possible when assesse is Resident of one country & derives income from another country.

DTAA makes provision for elimination on double taxation in one of the following manner:

  • Granting exclusive right to tax to one of the countries.
  • Granting taxing rights to both countries but making a provision for limiting the rate of taxation of each country.
  • Granting right to resident of another country to obtain credit for taxes paid in the source country.

We at CA Atul Mangal & Co. offer DTAA advisory and tax compliance services to both Indian & Multinational Clients. And provide tax management services to NRIs too, by following the jurisdiction of the Indian laws and regulations along with overseas countries & Double Taxation Avoidance Agreements (DTAA)

Types of Bank Accounts an NRI can open

  • You can open, hold and maintain following types of accounts with an authorised dealer in India i.e. a bank authorised to deal in foreign exchange.

Non-Resident (Ordinary) Rupee Account – NRO Account

Non-Resident (External) Rupee Account – NRE Account

Foreign Currency Non Resident (Bank) Account – FCNR (B) Account

  • Salient features of the above accounts are as under :

Particulars

FCNR (B) Account

NRE Account

NRO Account

Joint account of two or more NRIs

Permitted

Permitted

Permitted

Joint account with another person resident in India

Not permitted

Not permitted

Permitted

Currency in which account is denominated

Pound Sterling/ US Dollar/Jap.Yen/Euro

Indian Rupees

Indian Rupees

Repatriability –
Principal

 

 

 

Freely repatriable

 

 

Freely repatriable

 

 

Not repatriable

(except current income like rent, dividend, pension etc. and remittances indicated under “Repatriation of NRO Funds”)

Interest

Freely repatriable

Freely repatriable

Freely repatriable

Foreign currency risk

Account holder is protected against changes in INR value vis-à-vis the currency in which the account is denominated.

Account holder is exposed to the fluctuations in the value of INR.

Account holder is exposed to the fluctuations, in the value of INR to the extent of interest amount.

Type of accounts

Term deposits only.

Current, Savings, Recurring, Fixed Deposits.

Current, Savings, Recurring, Fixed Deposits.

Period of fixed deposits

For terms not less than 1 year and not exceeding 3 years

For the periods as announced by the deposit taking bank.

For the periods as announced by the deposit taking bank.

Rate of interest

Banks are free to determine interest rates within the ceiling, if any, prescribed by the Reserve Bank

Banks are free to determine interest rates.

Banks are free to determine interest rates.

Rupee Loans in India against Security of the funds held in the account to :
Account holder
Third Party

 

 

Permitted
Permitted

 

 

Permitted
Permitted

 

 

Permitted
Permitted

Foreign currency loans outside India against security of the funds held in the account to :
Account holder
Third Party

 

 

Permitted
Permitted

 

 

Permitted
Permitted

 

 

Not permitted
Not permitted

Frequently Asked Questions

Q1: What are the types of Residential Status for an Individual?

- Resident in India, which is further divided into the
following two categories:

    • Resident and ordinarily resident (ROR).
    • Resident but not ordinarily resident (RNOR).

- Non-resident in India (NR).

Q2: How to Calculate Residential status on the basis of number of days of stay in India?

Under section 6(1), an individual is said to be resident in India in any previous year, if he satisfies

Any one of the following conditions:


(i) He has been in India during the relevant previous year for a total period of 182 days or more, or


(ii) He has been in India during the 4 years immediately preceding the relevant previous year for a total period of 365 days or more and has been in India for at least 60 days in the relevant previous year.

If both the above conditions are not satisfied, the individual is a non-resident.

Exceptions:

The following categories of individuals will be treated as resident in India only if the period of their stay during the relevant previous year amounts to 182 days or more. The condition of presence in India for 60 days or more in the relevant previous year is not applicable for such individuals.


(i) Indian citizen, who leaves India during the relevant previous year as a member of the crew of an Indian ship or for purposes of employment outside India, or

(ii) Indian citizen or person of Indian origin who, being outside India comes on a visit to India during the relevant previous year.

However, such person having total income, other than the income from foreign sources

[i.e., income which accrues or arises outside India (except income from a business controlled from or profession set up in India) and which is not deemed to accrue or arise in India],

exceeding 15 lakhs during the previous year will be treated as resident in India if -

- The period of his stay during the relevant previous year amounts to 182 days or more, or


- he has been in India during the 4 years immediately preceding the previous year for a total period of 365 days or more and has been in India for at least 120 days in the previous year.

Note - Stay in India for 120 days in the relevant P.Y. is not a standalone condition. This condition requires stay in India for 120 days in the relevant P.Y. + 365 days in the 4 years immediately preceding the P.Y.

Q3: When are you considered as a Non-Resident Indian (NRI)?

A person who is not a resident of India is considered to be a Non-Resident of India (NRI). In case you do not satisfy either of the above conditions, you will be considered an NRI.

Q4: Who is Resident but not ordinarily resident (RNOR)?

A person is said to be "Resident but not ordinary resident” in India, if such person is:

  1. non-resident in India in 9 out of the 10 previous years preceding that year, or
  2. during the seven previous years preceding that year been is in India for a period, 729 days or less; or
  3. Citizen of India, or a person of Indian origin, having total income, other than the income from foreign sources, exceeding Rs. 15 lakh during the previous year, and who has been in India for a period of more than 120 Days and less than 182 days
  4. A citizen of India who is deemed to be resident in India under clause (1A).

If any of the above conditions fulfilled, the person shall be treated as “Resident but not ordinary resident” otherwise “Resident –ordinary resident”.

Q5: Who is a ‘PIO’?

A ‘Person of Indian Origin (PIO)’ means a foreign citizen not being a citizen of Bangladesh, Pakistan or other countries as may be specified by the Central Government from time to time if

  1. a) at any time, held an Indian Passport or
  2. b) who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

c) he/she is a spouse of a citizen of Indian or a PIO

Q6: Who is an ‘OCI’?

A Overseas Citizen of India (OCI) means any foreign national who was eligible to become citizen of India on 26th January 1950 or was a citizen of India on or at any time after 26th January 1950 or belong to a territory that became part of India after 15th August 1947 is eligible for registration as OCI. Minor children of such person are also eligible for OCI. However, if the applicant has ever been a citizen of Pakistan of Bangladesh, he/she will not be eligible for OCI.

Q7: What is ‘Deemed Resident’?

An individual, being an Indian citizen, having total income, other than the income from foreign sources
[i.e., income which accrues or arises outside India (except income from a business controlled from or profession set up in India) and which is not deemed to accrue or arise in India],

exceeding ` 15 lakhs during the previous year would be deemed to be resident in India in that previous year, if he is not liable to pay tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature.

However, this provision will not apply in case of an individual who is a resident of India in the previous year as per section 6(1).

Q8: When should an NRI file his return of income in India?

An NRI, like any other individual taxpayer, must file his return of income in India if his gross total income received in India exceeds Rs 2.5 lakh for any given financial year. Further, the due date for filing a return for an NRI is also 31 July of the assessment year or extended by the government.

Q9: Is my income earned abroad taxable in India?

An NRI’s income taxes in India will depend upon his residential status for the year as per the income tax rules mentioned above. If your status is ‘resident’, your global income is taxable in India. If your status is ‘NRI,’ your income earned or accrued in India is taxable in India.
1. Salary received in India or salary for service provided in India, income from a house property situated in India, capital gains on transfer of asset situated in India, income from fixed deposits or interest on a savings bank account are all examples of income earned or accrued in India. These incomes are taxable for an NRI.

2. Income which is earned outside India is not taxable in India.

3. Interest earned on an NRE account and FCNR account is tax-free. Interest on NRO accounts is taxable in the hands of an NRI.

Q10: How is resident/ non-resident status relevant for levy of income tax?

In case of resident individuals and companies, their global income is taxable in India. However non-residents have to pay tax only on the income earned in India or from a source/activity in India.

Q11: I am going out of India. Who will file my income tax return for this period?

You can authorize any person by way of a power of attorney (POA) to file your return. A copy of the power of attorney should be enclosed with the return.

Q12: I am planning to move out of India. What should I do with my existing Bank Accounts?

Before moving out of India, an individual should initiate closure of all the savings bank accounts, consolidate them and switch to an NRO account. An NRO savings account is where you can maintain and manage your income earned in India, such as from rent, dividends and pension. Some banks even allow to re- designate your existing bank accounts into NRE accounts also.

Q13: I am planning to move out of India. Is DTAA relevant for me?

It is also good to check whether the country of migration has a DTAA (Double Tax Avoidance Agreement) with India. There are many countries with which India has a tie-up to ensure there is no double taxation on income earned in one country and taxes are paid in both countries. This is to ensure that taxes are not paid twice.

Q14: Does an NRI also have to pay advance tax?

Yes, if an NRI’s tax liability is expected to exceed Rs. 10,000 in a financial year, he must pay advance tax. Interest under Section 234B and Section 234C will be levied if advance tax is not paid.

Q15: Acquisition / transfer by a Non – Resident Indian (NRI) – Payment for Acquisition of Immovable Property?

  1. NRIs / OCIs can make payment for acquisition of immovable property (other than agricultural land / plantation property / farm house) out of funds received in India through normal banking channels by way of inward remittance from any place outside India or by debit to his NRE / FCNR (B) / NRO accounts.
  2. Such payments cannot be made either by traveller’s cheque or by foreign currency notes or by other mod except those specifically mentioned above.

Q16: What are the various loan options available to an NRI? NRIs can avail loans as per following:

  • Housing loan
  • Car Loan
  • Rupee Loans against NRO, NRE and FCNR (B) fixed deposits
  • Foreign currency loan in India against the security of funds held in FCNR (B) accounts
  • Loan against the security of shares or other securities held in the name of the borrower or against the security of immovable property
  • Rupee Loan against security of assets 'other than shares and immovable property'

Q17: Is there a limit on the number of beneficiaries in India or amount that NRIs can remit money to?

No, there is no such restriction on number of beneficiaries in India or amount of remittances, to whom NRIs can send remittances. However, there may be a restriction in your current country of residence.

Q18. Is the amount in RFC accounts fully repatriable?

Funds become full repatriable only if account holder has regained NRI status. If account holder is of RNOR or resident Indian status, then funds can be repatriated as per laws applicable for resident Indians.

Q19. Which type of funds can be deposited in NRO account?

Funds as detailed hereunder can be deposited to NRO account:

  • Transfer from another Resident Indian / NRE / NRO / FCNR (B) account
  • Fresh remittance from abroad through banking channel
  • Personal cheques drawn on foreign account
  • Proceeds of Foreign Currency Notes / Travellers cheques tendered by NRI / PIO / OCI, while visiting India. Amounts in excess of USD 5000 (or equivalent) in currency or USD 10,000/- (or equivalent) in traveller’s cheques should be accompanied by a Currency Declaration Form

Interest, dividend and maturity proceeds of investments made in India etc. on non-repatriable basis

Q20. Which type of Incomes are taxable to NRI, RNOR and ROR?

The following chart highlights the tax incidence in case of different persons:

Nature of income

 

ROR (*)

 

RNOR (*)

 

NR (*)

 

Income which accrues or arises in India

 

Taxed

 

Taxed

 

Taxed

 

Income which is deemed to accrue or arise in India

 

Taxed

 

Taxed

 

Taxed

 

Income which is received in India

 

Taxed

 

Taxed

 

Taxed

 

Income which is deemed to be received in India

 

Taxed

 

Taxed

 

Taxed

 

Income accruing outside India from a business controlled from India or from a profession set up in India

 

Taxed

 

Taxed

 

Not taxed

 

Income other than above (i.e., income which has no relation with India)

 

Taxed

 

Not taxed

 

Not taxed

 

We are providing specialized & personalized services in NRI taxation as we have the exposure of dealing Non-residents for about 2 decades

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