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NRI Estate Planning NRI Estate Planning

Estate Planning For NRI

As an Estate Planner we encounter a lot of NRI clients who are still not aware about or conscious of Estate Planning. An overwhelming majority of Resident Indians/ NRI still do not have a professionally written will and the actual numbers will be closer to 85%+. 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 highcost and timedelay 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.

Estate Planning For NRI

What exactly is Estate Planning?

“Estate planning can be defined as the process of anticipating & arranging for the disposal of an estate. 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.”

  • Estate Planning Drafting/ Redrafting/ Reviewing services

    We can help you draft:
    • Individual Will
    • Couple Will
    • Joint composite will ( for assets across geographies)
    • Family Trust Deed
    • Shareholder Agreement
    • Family settlement agreement
    • Trust deed for special child/ Minors
    • Letter of Guardianship
    • Guardianship Petitions
  • Property Matters Drafting Services:

    • General POA
    • Special POA
    • Release Deed
    • Gift Deed
  • Probate/ Letter of Administration/ Succession Certificate

  • Setting up of:

    • Trust (Private/ Charitable)
    • Family Office
    • AOP
    • Family Limited Partnership
  • Advisory On:

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

    At DAA, 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.

Asked Questions

  • Q: When are you considered as a non-resident Indian (NRI)?

    A person who is not a resident of India is considered a non-resident of India (NRI). You are a resident if your stay in India for a given financial year is: 182 days or more 60 days or more and 365 days or more in the 4 immediately preceding previous years In case you do not satisfy either of the above conditions, you will be considered an NRI.

  • Q: 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.

  • Q: Is income from rental income taxable in India as well as abroad?

    If there is a rental income in India, then Income tax return need to be filed in India mentioning the PAN and tax to be paid. Also to note, that though holding one property in India is considered as ‘self-owned’, a second property, even if it is not on rent, is considered ‘deemed rented’ and tax needs to be paid for that. You can, however, show 30% of the deemed rental as ‘maintenance cost’. There is no tax to be paid abroad (say, USA) on ‘deemed’ income, but declaring it is important as during repatriation of funds from India, it should not cause any issue.

  • Q: Is an NRI taxable on the income he receives in India, in his country of residence? What is the role of the Double Taxation Avoidance Agreements (DTAA) here?

    If an NRI receives income in India, such income is taxable in India, i.e. India as a source state has the right to tax such income. However, the country where such NRI is a resident will also have a right to tax such income as it is the residence state. This way, the NRI will end up getting taxed twice on the same income. To overcome this, India has entered into DTAAs with various countries. It will help eliminate double taxation by allowing the taxpayer to claim credit for foreign taxes paid while filing their return of income in the home country.

  • Q: Is Income tax Act applicable only to residents?

    No, The Income tax Act applies to all persons who earn income in India. Whether they are resident or non-resident.

  • Q: 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.

  • Q: I own shares of various Indian companies and receive dividends. Is it taxable?

    Yes, The dividend declared by Indian companies is taxable in the hands of the shareholders at the rate of 20.00% without providing for deduction under any provision of Income Tax Act.

  • Q: 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 to file your return. A copy of the Power of Attorney should be enclosed with the return.

  • Q: 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.