Does an NRI have to file taxes after obtaining a PAN card? This is a question that I am asked all of the time. The answer is no, not always. There are many times when it is not necessary to pay taxes even though you have a Permanent Account number.

NRIs are Indians living abroad in a different country. In this article, we are considering those with a foreign passport and an OCI card as well. Some of you need to apply for a PAN card in order to get some of your financial issues sorted out back in India while continuing to live abroad. This may be because you used to live in India and you may have left some finances there or are planning on moving back. A PAN card is similar to an SSN number in the United States as it is given to people in order to keep track of what taxes are paid and what are not. Your PAN card number is allotted to you by the Income Tax Department of India.

NRIs need to apply for PAN card to do the following things:

-They need a PAN card for investing in India

-Opening a bank account in India

-Applying for a loan in India

-Opening a demat account in India

-Filing taxes in India

-Opening up a company in India

-Buying and selling a commercial or a private property in India.

Just because a PAN card is also known as an income tax number doesn’t mean that you are entitled to pay taxes in India. You do not have to pay taxes in India if you do not have an income in India. An income does not just mean a job. An income can mean property tax, or tax on investments, etc. If you are living abroad and you only need a PAN card in order to open a bank account or to have an extra ID proof and you are not generating an income in India, then you do not have to file taxes. If you are generating even a little bit of income in India then you will have to file taxes. Especially, if you are working in India or are making investments in India, then you should pay taxes.

Some say that it is advised to file taxes even if you don’t have an income in India. If you file zero taxes it may still help out your credit score so that you can apply for a loan or something in the future. It also keeps everything up to date with the Income Tax Department and keeps you in good standing with the government.

If you are ready to get started, when you go to http://www.nriinvestindia.com/pancard.html and apply for your PAN card, don’t worry about having to file taxes unless you’re generating an income in India. If you apply for a PAN card online through an online company, you can ask them any questions you may have when filing up the applications or any questions about filing taxes. Make sure you take your time filling out the application so that it will get approved right away and you can get whatever you need to done. It can be a tedious and time consuming process if you do not make sure that everything is done correctly the first time. If you are looking to file taxes, NriInvestIndia.com can help send you to the right person to do that while living abroad.

It can actually become a very tedious process to apply for a Permanent Account Number in India. It gets even worse when you are living abroad somewhere. Let’s say you are a UK resident, but you hold an Indian passport. You want to apply for a PAN card through the Indian government without having to go to India. This is close to impossible without something going wrong. So, what do you do?

Click here to know all the documents needed >>

There are now brokers that can help you with this. When you are using a broker, you do not have to deal directly with the Indian government at all. You deal with your broker and your broker will deal with the PAN department.

Do you know how the process works? Well, When you send in your application directly to the government or to a broker and the government receives it, they check your application for mistakes. Now, in the PAN department in India, they are usually tired and do not care much about getting your PAN card. It is more work for them if they accept your application, so they find every reason not to. This makes it difficult on you because that means your application need to be almost perfect.

Once the PAN department accepts your application, it is forwarded to the IT Department where they go through and come up with a PAN number to allot you with. This is a special number that no one else has. It is uniquely yours. After you are allotted a number, the PAN department will send out your card using a simple cheap speed post.

When you are living overseas, the card has quite a way to travel. This is another time when many problems occur. Sometimes the card gets lost in transit and you will never see it. Then you would have to apply for a new one and go through the process all over again. Sometimes, when you receive the card, there is a printing mistake done by the PAN department and again you will have to apply for a duplication card with corrections.

There are also times when you will not be home when the card gets there and the post office will send it back to India. When it is returned, Its status is RUD lying in Mumbai. This is because it is always sent back to the Mumbai office. This is another long process to get it out of there and sent back to your house. Many people find it easier to just apply for a duplicate card instead of going through the hassle of having the card returned.

A broker can help you with all of these problems. When you apply for a PAN card through a broker, you have three simple jobs.

1. Fill up the forms and provide the documents necessary.

2. Send them to your broker’s office.

3. Wait for you PAN card.

That’s it! There is not much more you have to do. Your broker will take care of any problem that they come across and let you know if there are any more documents or information that is needed from you.

Are you worried about the documents needed? The documents that you need to provide a pretty simple. You just need an ID proof document, and address proof document, and 2 photographs.

The ID proof document is the easiest. You just need to provide your passport copy, no matter what passport you hold, this will work.

The address proof is where it is a little bit more difficult. You have an option to use your passport copy if it states your address in your passport. You can use your OCI card copy or your PIO card copy if it states your current address. You can use an original bank statement stating your address or an e-statement that is attested by the bank. If you do not have any of these, then you will need to use a utility bill or another form of address proof and have it APOSTILLED by the Secretary of State’s office in your area.

Now for the photos: On the application, it says that you have to have a stamp size photo for PAN card, but in all reality, any passport size photo will do. It should be a front facing photo with a white background and good lighting.

If you have lost your PAN card and you are looking to apply for a duplicate or replacement PAN, then there is one more document you will have to attach to your application before sending it. You will need to provide a copy of your old PAN card. If you do not have a copy, then you can look up your PAN card number and print the page that shows your results as evidence and that will do just fine.

If you are still confused about the process on apply for a PAN card, write into the representatives at http://www.nriinvestindia.com/nri-apply-pan-card-online.html. They can help you further and as a broker, they can help you with the entire PAN card process if needed.

Good Luck NRIs!

A couple of examples of tax-free bonds in India would be: NHAI and PFC. These are tax-free and are listed on the stock exchange for anyone to trade them. An Investor has the option to substitute a fixed deposit with a tax-free bond if needed.

If you are an investor that is looking to make long term profits from investing in bonds, then it would make more since for you to invest into a taxable bonds and not tax-free bonds. This is because it is less common for tax-free bonds to be traded.

If you do not know how bonds work, when the interest rates go down, bond yields also go down and their prices go up. When this happens and the interest rates are low, it gives investors and opportunity to profit from it.

If you are an NRI ready to invest in bonds in India, there is a process when getting set up. You will need a PAN card number for tax purposes. It is a requirement to have one before investing at all in India. Lucky for you, there is an easy way of going about getting anything you will need to start investing. If you visit: http://www.nriinvestindia.com/nri-apply-pan-card-online.html, you will find step by step assistance when obtaining your pan card. They can also lead you in the right direction when you reach the next step in the process of investing in India.

Let’s look at the first one, an NRE account. NRE stands for NON-Resident External account. When you open an NRE account, you will need to deposit a foreign currency into that account from wherever you are living abroad. You can use cash or a traveler’s check to do this. If you have business in India, instead of you receiving your payment abroad, you can simply have it put into your local NRE account for your use. This can only be done if your money CAN be remitted abroad. A benefit to having an NRE account is that any interest accumulated in an NRE account will be completely exempted from taxes as it is treated as a “gift”.

Now, we can talk about the NRO account. NRO stands form Non-Resident Ordinary account. NRO accounts are usually opened in India with Indian Rupees. These accounts are usually opened by those who are not an NRI yet, but are planning to move abroad. If you have an NRO account and wish to have a second one, it can be opened by simply transferring funds from your old NRO account to your new one. The main difference between an NRO and an NRE account is that you have to report your funds going in and out of an NRO account because it is taxable. Money that CANNOT be remitted abroad will need to be placed in an NRO account. With an NRO account, any interest accumulated in your account will be taxable under your tax bracket.

If you are an NRI and you have opened an NRO account as well as an NRE account, you can transfer your money from your NRE account to your NRO account anytime. IF you are wanting to transfer your money from your NRE account to your NRO account, it cannot be done.

In order to open an NRO account, or an NRE account, you will need to have a PAN card (Permanent Account Number). You can obtain a PAN card from your country abroad by using this website: http://www.nriinvestindia.com/nri-apply-pan-card-online.html

What are Capital Gains?
If you are planning on Investing in India, you need to understand that taxes and tax laws involved with the process. First, let’s discuss the difference between short-term capital gains and long-term capital gains. When you are investing in a share, debenture, bonds, UTI units, or mutual funds, your capital gain would be a short-term gain. This is because you hold these assets for less than a year (12 months). When you hold assets such as immovable property and jewelry for up to 3 years, that gain is a short-term gain. Explaining a long-term gain is simple. These are your gains from your assets that you hold for a longer period of time.

Tax on Capital Gains
The reason that we separate capital gains into long-term and short-term is because they are taxed differently. Short-term gains are taxes the normal tax rates and long-term gains are charged a flat rate tax charge. If you are an NRI looking to invest in Global Depository Receipts and/or Euro Issues, you will be taxed a different rate.

Tax Exemptions for NRIs
While investing and keeping your profits in mind, you need to consider taxes and tax laws as well. Look over the following exemptions for taxes before investing in India:

•  Exempt from taxes: Any Long-term gains from selling equity shares and equity-oriented mutual funds.
• Exempt from taxes: Reinvesting a net sale long-term capital gain into specific assets. You will need to look into this exemption in detail further.

Setting off capital gains and capital losses
If you have capital gains from shares, that can set of a capital loss you may have had from other shares, but this only works when they where both done within the same year and if the loss happened before the gain. If you are looking to benefit from this set off, there are things and formalities that you will have to complete first. NRIs always have to apply for a (TEC) Tax Exemption Certificate. If the loss is more than the capital gain, then the gain will not set off the loss completely, but you can carry the loss and adjust it into the next year.

If you are an NRI looking to file your capital gains tax return online, then you will first need to get a PAN number.

You can apply for one and start your process at:
http://www.nriinvestindia.com/nri-apply-pan-card-online.html

If you have applied for your pan card, but you don’t have it and cannot remember the number, you can search at website: https://incometaxindiaefiling.gov.in/knowpan/knowpan.jsp.

You will be asked to verify your identity by answering the following: First name, Middle Name, Surname, and Birth date. Once you have filled that out, you can search and your results will come up with your PAN card number.

If you are a Non-Resident India, OCI, or a PIO card holder, and your information does not appear on the results page or you would like to apply for a new/duplicate PAN card, you may consult: http://www.nriinvestindia.com/nri-apply-pan-card-online.html

NRIs can easily apply for a PAN number.

There are PAN card departments everywhere now. That office is just for processing PAN card applications and sending them out. Sometimes, there is more that one in one city because of the size of the city. If you are in India, you can just go there and apply for one. Now, NRIs that are not in India can not just go there anytime and apply. For NRIs, there are private brokers willing to help you. nriinvestindia.com is one of them.

The government PAN department will only take applications that are completely and correctly filled out, have all of the correct documents and photos, and the signature is exactly in the box at the bottom. When you go through a broker, you don’t even have to fill up the application, they can do it from their office with all of your documents.

Now, You have a clear picture that Investments in NRE deposits is sometimes more fruitful than NRO. But what about investments that you have already made in NRO accounts and deposits that are attached to NRO account? This is one Big question.

Another thought that may come to you to transfer all NRO deposits to NRE deposits? Is it possible?

My answer will be Big YES. Now it is possible to transfer funds from NRO to NRE, but hold on, this cannot be done on click of mouse. You need to do some paperwork to get this done. Following documents/ paperwork are required:

1. Form 15CB (a certificate by Chartered Accountant in India).
2. Form 15CA
3. Form A2 (FEMA)
4. Source of Funds
5. Proof of taxes paid (if any).

CLICK HERE to get Form 15CB & 15CA

Above transfer is restricted to overall ceiling of USD 1 million per financial year and shall be subjected to payment of all relevant taxes in India (if any), on funds to be transferred from NRO to NRE.

The Reserve Bank of India permitted this transfer via circular passed on May 7, 2012.

http://rbi.org.in/scripts/NotificationUser.aspx?Id=7180&Mode=0

So, what are you waiting for? Please proceed to enjoy tax free Investment in India.

Coming on to NRO, did you ever thought of claiming back excess tax deduction on your NRO account? Your answer must be Positive.

My next question, Are you looking to repatriate some of your money, either in NRE or NRO account, back to your resident country? Are you saying YES?

Then, please do remember to catch my next article that will follow.

There is relative Liberalization in FDI in past years, as most of sectors come under route of automatic approval. There are different form of business in India that one can register for, but you, being an NRI/ foreign national/ Foreign company etc cannot register for all but are eligible for few entities as below:

CLICK HERE to Get FREE Advise on Foreign company business registration in India.

1. Joint venture: There is no any fixed law that defines about Joint venture. Joint venture is a ‘consortium’, two companies come together to carry specific project. Joint venture can be in a form of Private limited company, where two different companies can be shareholders.  Joint venture can be said to be a temporary partnership between two or more persons to carry out any particular project.
2. Private Limited company: This is one of the most common form of business that are generally opted for. No need for any Indian partner (director) to register this form. It can be said to be a voluntary association of two or more person together to carry out business with Limited liability. Foreign company can register subsidiary in India as a private Limited company. Look at the features that may call you to opt this form: Limited liability, Independent legal existence, reliable, less cumbersome, little complicated, easy to register and more……
3. Public Limited Company: Unlike private Limited, Public limited company is full fledged corporate entity. Shares of Public limited company is owned by public and are freely transferable among them. Registration and Incorporation of this form is quite lengthy and complex process. Any Private Limited company that is subsidiary of any Public limited can be said to be public limited company. Min features of this form: Unlimited liability, Democratic form, efficient management etc.
4. Limited liability Partnership: LLP is a corporate form of partnership firm. There should be an Indian partner to begin with.  It combines features of partnership and limited liability. It embrace features of a private limited company that grants freedom of formulating their Internal management as per their mutual agreement. It is governed by Limited liability Act, 2008 and pay no attention to Indian Partnership Act, 1932.
5. Branch, Project or Liaison office: Any Foreign company doing business for minimum 5 years, having a good profit track record and net worth of USD 100,000 as per last audited statement can opt for opening a branch in India. Branch office of foreign company in India can carry out similar business as that of head office. Liasion office cannot do any profit making activity and instead, carry out any marketing or survey in India. All the expenses will be that of head office. Project office, on the other hand can be set up for any specific project to be carried on in India.

ISSUE:

Issue Opening Date: December 14, 2012
Issue Closing Date: December 21, 2012

DOWNLOAD: Power Finance Bond Application Form (CLICK HERE)

Issue Structure:

Issuer: Power Finance Corporation Limited

Type of instrument: Tax free bonds of face value of Rs 1,000 each, in the nature of secured, redeemable, non-convertible debentures, having benefits under section 10(15)(iv)(h) of the Income Tax Act, to be issued in one or more tranches on the terms and conditions as set out in Prospectus Tranche -I

Nature of the instrument: Secured

Seniority: Pari passu with other secured creditors

Mode of the issue: Public issue

Interest rate: @ the rate of 7.19% p.a. and 7.36%p.a. on Tranche 1 Series 1 and Tranche 1 Series 2 respectively for allottees under Category 1, Category II and Category III Portion, and @ the rate of 7.69% p.a. and 7.86% p.a. on Tranche 1 Series 1 and Tranche 1 Series 2 respectively for allottees under Category IV Portion. (subject to deduction of tax at source, as applicable)

Interest type:  Fixed

Frequency of interest payment: Annual

Day count basis: Actual/ actual

Interest on application money: @ the rate of 5.00 % p.a. for all Category Portions , (except for ASBA Applicants), (subject to deduction of tax at source, as applicable)

Tenor / Maturity: 10 years and 15 years from the Deemed Date of Allotment

Redemption Date: 10 years and 15 years from the Deemed Date of Allotment

Redemption Amount: The principal amount on the Bonds along with interest accrued on them as on the Redemption Date

Issue Price (in Rs.): Rs. 1,000

Discount at which security is issued and the effective yield as a result of such discount: Not applicable

Put /Call Option: Not applicable

Face value: Rs. 1,000

Minimum application size: 5 Bonds (Rs. 5,000) across all the Series of Bonds and in multiples of 1 Bond (Rs. 1,000) thereof

Market Lot/ Trading Lot: One Bond

Pay-in date: Application Date

Credit ratings: “ICRA AAA” by ICRA, “CRISIL AAA” by CRISIL

Listing: BSE

Issue size: Rs. 1,000 crores

Option to retain oversubscription: Upto shelf limit of Rs. 4,590 crores

Debenture Trustee: IL & FS Trust Company Limited

Depositaries: NSDL and CDSL

Registrar: MCS Limited

Issuance: Dematerialised form or physical form* as specified by an Applicant in the Application Form

Trading: In dematerialised form only

Issue opening date: December 14,2012

Issue closing date: December 21,2012. The Issue shall remain open for subscription from 10:00 a.m. to 5:00 p.m. (Indian Standard Time) for the period indicated above, except that the Issue may close on such earlier date (such early closure being subject to the Category IV Portion being fully subscribed prior to such early closure) or extended date as may be decided by the Board or the a duly constituted committee thereof, subject to necessary approvals. In the event of an early closure or extension of the Issue, our Company shall ensure that notice of the same is provided to the prospective investors through an advertisement in a reputed daily national newspaper on or before such earlier or extended date of Issue closure

Deemed date of Allotment: The date on which the Board of Directors/or any committee thereof approves the Allotment of the Bonds for each Tranche Issue or such date as may be determined by the Board of Directors/ or any committee thereof and notified to the Designated Stock Exchange. All benefits relating to the Bonds including interest on Bonds (as specified for this Issue in this Prospectus Tranche Issue-I) shall be available to the Bondholders from the Deemed Date of Allotment

>>> PFC Bonds Application Form: DOWNLOAD HERE