nri taxation

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  We have helped 15000+ NRIs

with their taxes in India
 
 

 

nriInvestIndia is the leader in Non resident financial services segment, offering complete legal & tax consulting solutions to expatriates, NRIs, PIOs, OCIs & International Companies!

 

 
  NRI income tax preparation/e-filing
  Service, Property, Wealth & Gift Tax
  Company Formation & Registration
  DIN & (DSC) Digital Signature
  15CB, 15CA, Repatriation certificate
  Advisory on Tax planning & saving.



 

 
nri income tax return NEED ASSISTANCE?
Ask our Senior Tax Expert:
 

Ms. Ushma Jain: B.com, CA, CS and Diploma in International Taxation.

Having worked with 1000s of NRI and International firms, our expert posses the right acumen vis-a-vis international taxation to assist you - Efficiently!
 

Name:
Email:
Your Questions:


 

 
 

       

 
 

 

India Tax Filing
For NRI
Rs.5000 only

Step:1 > Start by contacting us below.

Step:2 > Our consultant contacts you to discuss your case.

Step:3 > You provide the docs and the consultant prepares your taxes.

Step:4 > The consultant sends you the summary for approval.

Step:5 > If all looks good, we go ahead and file your taxes & send you the tax receipt.

That's it!


 

Contact Us Now


 
 
 
 
 
Our commitment:

Our team of experts can deliver quality advisory services on various sectors like, NRI property taxation, capital gains tax, withholding taxation issues, individual and company income tax filing. We also provide consultancy services & insight to expats living in India.


Some Insight on Indian taxation rules:


The basis of the Indian tax structure is laid down in the constitution of India. According to article 265 of the constitution, a tax can be levied by the authority of the law. For this reason, an appropriate state or union law has to be passed before any relevant tax can be collected.

The framework of the Indian taxation rules was created on the basis of article 246 and the famous Income Tax Act of 1961. Since 2005, these rules have been simplified to a large extent and the tax structure has become easier to comprehend. This has increased collection and the transparency of the entire system.


The basic taxation structure is as follows:

- Since the country follows a quasi-federal structure of governance, certain powers are exclusively in the hands of the central government as defined by the union list. The state list defines the subject which is under the control of the state. If any tax is to be imposed or modified on the subjects on union list, the central government has to pass a law. Same is required of the state government for state list. No taxes are imposed on the items of concurrent list which is jointly administered by the center and the state.

- Union government can impose thirteen different taxes at present. These include income tax, excise and custom duties, corporation tax, estate duty, stamp duties, terminal tax etc.

- State government has the authority to impose nineteen different taxes including land revenue, tax on agriculture, tolls, taxes on consumption and sale of electricity, capitation tax, stamp duty etc.

- One of the important organizations in the Indian tax structure is the Central Board of Direct Taxes. It is a statutory body constituted under the Department of Revenue, Ministry of Finance in 1924. It administers the direct taxes in the country. In 1964, the Central Board of Excise and Customs was separated from this body.

- The direct taxes in India include the income tax, capital gains tax, fringe benefit tax, securities transaction tax etc while the indirect taxes include excise and custom duties and service tax.

- The Income Tax Act of 1961 is the milestone law in the Indian taxation system. It levies income tax on incomes accrued through either of five different channels like income from salaries, business, houses or property, capital gains and from other sources. The rate is decided by the parliament in the annual budget.

- There are special provisions for taxation of NRIs and foreign companies in India. In general, taxes are charged only on income earned in India alone.

Major reforms in the tax structure after 1991.

1991 marked the era of liberalization and its effects were also felt on the tax structure of the country. Some major changes are:

- The Tax Reform Committee created a system where rate of income tax varied according to different income groups. Annual earnings below Rs. 50,000 were exempted. This exemption limit has now been raised to Rs. 2, 00,000.

- The agricultural income of non farmers above Rs. 25,000 was made tax liable at par with income tax.

- Corporate income tax was drastically reduced in order to woo foreign investment.

- A few new taxes were introduced. For example, in 1994, union service tax was imposed on telephone, general insurance and stock brokerage.

- Since 1999, uniform rate of sales tax was adopted in the entire country, though it is a matter of state jurisdiction. It was gradually phased out in favor of value added tax which was uniformly implemented by all the states since December 2005.


 
Other important NRI, PIO & OCI related TAX faqs:
 
I am a non-resident Indian getting interest on my NRE Account - Is the interest taxable?

NO. The interest you earn is not taxable.

 
How can I legally repatriate the total proceeds of the sale of my property?

You can only repatriate the money and profits (capital gains)  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.
 

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