You
a non-resident getting interest on your NRE Account - Is the
interest taxable? |
|
NO. The interest you earn is not taxable. |
| |
|
How can you legally repatriate the total proceeds of the sale
of your property when you have a ‘white’ and a ‘non-white’
value? |
|
You can only repatriate the money accounted for (white
value). You cannot repatriate the money that cannot be
accounted for (non-white value).
|
| |
|
The capital gain tax is same irrespective of whether I sell my
long-term and short-term capital asset. Is this true? |
|
No. This is untrue. The capital gain you would receive by
selling your short-term capital asset would be taxed as a
normal income, while that against your long-term capital
asset, with indexation, would be taxed at 20%. |
| |
|
As a NRI due to acquire citizenship of a foreign land, I am
worried about the property I am going to inherit. Is it wrong
to keep inherited land as an OCI? |
|
It is not wrong to keep/maintain
inherited land as an OCI. This is mainly because you, as
an OCI, have added privileges compared to a PIO. However,
if you decide to sell your property, you can do so only to
a Resident Indian, and not a non-resident (NRI, PIO or
OCI). |
| |
|
I have a NRI PAN and all my earnings are from abroad. Do I
have to pay tax for the same? |
|
No. Your income is taxable ONLY if your income is
generated from within the Indian Territory. Just because
you have a PAN does not mean you have to pay tax. |
| |
|
Some of my friends/relatives have told
me that I need to declare my savings in my NRE Account and
also pay tax for the same. Is this true? |
|
If you are a non-resident for five or more years, you do
not have to pay any tax against your NRE Account. Also tax
is collected only on interest, not capital. |
| |
|
My office/company is sending me abroad. What happens to my
savings back here? Can I continue with the same account? And
if yes, then do I have to pay tax? |
|
You need to inform your bank of your
NRI status so that your savings bank account can be
converted to a NRO Account. You may use this the same way
you were before acquiring your NRI status. If you are a
shareholder with/in any company, you need to inform them
also about your NRI status. However, if you already have a
DMAT account, it is not needed. But your Depository
participant (DP) HAS to be informed. You will file your
tax returns as a NRI, but not if your income is less than
the minimum taxable income in India. But, we advise you to
pay tax to maintain continuity irrespective of your
income. Also, if you had any investments or held any asset
prior to your becoming a NRI, you may handle them as you
did prior, the only difference being that your original
amount will become non-repatriable. We recommend that you
open a NRE Account as long as you are a NRI as the
interest you would receive in this account is tax-free. |
| |
|
Suppose I buy a property in India from my savings from abroad.
Can I sell it anytime or is there a lock in period? What are
the repatriation rules? |
|
You can sell you property anytime you want as per the
repatriation rules. Since the mid year review of the
economic policy by the RBI, the lock in period has been
lifted. |
| |
|
What is the rule of repatriation if I
take loan from an Indian Bank to buy property in India? |
|
Repatriation is possible IF you pay off the loan
instalments through your NRE Account or by transferring
funds from abroad. |
| |
|
As a citizen abroad, say from USA can I acquire property in India? If yes,
then will I be taxed in both India and my resident country?
Also, will I be taxed on my income from abroad upon my arrival
in India? |
|
As a PIO, you can acquire property, except agricultural
land, in India. If your resident country is one with whom
India has signed the DTAA, then you will not be taxed in
both the countries. Also, upon your arrival you will be a
RNOR, and will remain one for two years, implying that
your income from abroad will not be taxed. After this
period, your global income will be taxable. |
|
|
|
I
live out of India and have an account in India for
carrying out transactions in the secondary market in
India. Do I have to pay tax when I redeem/sell my shares? |
|
Firstly, equity based Mutual Funds (MF)
is governed variedly from debt based MF. While the
dividend is tax-free in both cases, in case of debt based
MF, you have to pay a dividend distribution tax to the
exchequer at 14.025%. This is not the case with equity
based MF. The latter is also exempt from long-term capital
gains tax while the short-term capital gains are taxed at
10.2%. |
|
|
|
I
plan to return to India. After my return: a) how long will
I be considered a non-resident or RNOR; b) for what time
period will my income from investments not be taxed; c)
what are the tax-free/safe investments in India? |
|
If you have stayed in India for 182
days in the relevant financial year, you will become a
Resident Indian. Please note that you cannot become a
Resident Indian directly if you are a NRI. If, as a NRI,
you are returning to India after nine or more years, you
will first become a RNOR and only then will become a
Resident Indian. As a RNOR your income is not taxable.
Only after you have acquired a Resident Indian status,
will your global income be taxable. Public Provident Fund
(PPF) is the only safe investment available in India as of
today. There are many tax-free investments but they are
all subject to market risks. |
|
|
|
I
lived in Canada before and currently living in
Australia for five years now and have a NRE
Account with an Indian Bank. If I become a citizen of this
country, do I have to close my NRE Account and open a
fresh one, or can I operate the same from here? |
|
As a PIO, you can operate your account from anywhere.
There is no need to open a fresh account. |
|
|
|
As
a resident abroad do I have to inform my Bank (in which I
have my NRE Account) if I buy commercial property in
India? |
|
It is not necessary to inform your bank
yet we would recommend that you do the same. |
|
|
|
I am working as an executive, on a
work permit, in UAE since 2005. I have a normal savings
account in India and am wiring my money to my family back
to India. Do I need to pay tax on money I am earning here,
and if not then how do I show my money on Form 16 so as to
make it tax-free? Is there any documentary proof required
for showing my source of income? Can I save tax by opening
a NRI Account as I am going to be here for another year? |
|
Let us put first things first. Having a
normal/conventional savings account in India, when you are
a NRI, is ILLEGAL. You HAVE to inform your bank about your
NRI status the moment you become one for the bank to
re-designate your account as a NRO Account. Capital
transfer is NOT liable to tax. If your income is money
generated from outside the Indian Territory, the question
of paying tax in India does not arise as the I-T
Department can only tax you on money received/generated
from within the Indian Territory. But your global income
is taxable, irrespective of its place of generation. You
may open a NRE Account for maintaining tax-free interest. |
|
|
|
I have a NRO FD. What is the TDS that will be deducted off
it? |
|
TDS is chargeable at 30.6%. |
|
|
|
Is
it true that the interest amassed in a NRE Savings Deposit
is tax-free and repatriable as long as I am a NRI? |
|
Yes this is correct. |
|
|
|
I have invested in MF by giving a
cheque from my NRE Account. Is my gains taxable? |
|
Please note that the gains are always
taxable. Only long-term gains from equity based MF are
tax-free. |
|
|
|
Is it compulsory to have PAN if I want
to invest in Indian MF? |
|
Yes, it is a
must to have PAN, along with recently introduced Mutual
Fund Identification Number (MIN), if you wish to invest in
Indian MF. |
|
|
|
Are the gains from trading MF
repatriable? Also, can the gains be transferred to my bank
account for tax credit? |
|
Yes, gains from MF are repatriable after taxes have been
paid, if any. These gains can be accredited to your NRE
Account after the relevant taxes have been paid. |
|
|
