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NRI Returning to India Assistance Service Provider NRI Returning to India Assistance Service Provider

NRI Returning to India Consultancy

There are lot of anecdotes of friends and family members who packed their bags to pursue opportunities overseas, but planned to eventually settle down in India itself. 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.

NRI Returning to India Consultancy

  • 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)
    • Claiming foreign tax credit and filing Form 67
    • 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
    • Advisory on investment in 401(k) for USA residents
    • 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 clearance required under FEMA from RBI to continue to hold assets outside India.
    • Facilitate re-investment of sale proceeds of assets acquired outside India.
    • Plan tax liability in India & country of residence
    • Assistance in Filing Return of Income

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 one does not satisfy either of the above conditions, one 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 return of income in India if 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 needs 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. One 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.

  • Q: How long can one maintain their NRE account after returning to India?

    You cannot maintain your NRE account and NRE FDs when you are an RNOR. You need to convert your NRE account to resident account immediately upon returning to India.

  • Q: What’s the FIRST (and easiest) step you must take from the above as a returning NRI?

    Open an RFC account. Resident Foreign Currency (RFC) is a Scheme approved by Reserve Bank of India permitting persons of Indian nationality or origin, who have returned to India on or after 18th April 1992 for permanent settlement (Returning Indians), after being resident outside India for a continuous period of not less than 1 year, to open foreign currency accounts with banks in India for holding funds brought by them to India.

  • Q: Can NRIs buy Indian life insurance or health insurance?

    Yes, of course, NRIs can buy life Insurance and health insurance in India and our term life rates in the country are among the best in the world. Therefore, there are a lot of NRIs who come and take a term plan here because the rates are attractive and we have the ability to give large value term life covers India has that ability to do that.