For non-resident Indians who have investments, bank accounts and property in India, we help manage their financial affairs. Some of the services we offer at Pxpertstax are monitoring records on their investments, completing regulatory and bank formations, planning their financial transactions to reduce their tax liability, filing an income tax return, etc.
Other services that we are experts at offering are:
As far as tax compliance is concerned, we are unbeatable with our services. We are backed by a team of experts who offer consultations and advisory on a broad range of NRI tax compliance-related matters including e-tax returns, banking, remittance, investments, etc. With us, you can file for compliance easily and quickly.
Through our professionals, we can determine your requirements and establish your financial goals. Besides, we can also develop strategies to help you achieve your financial objectives with manageable risk levels. With our NRI-related services, you can also get a portfolio designed as per your investment objectives. Additionally, we also monitor your strategy and execute investments.
NRIs can benefit from us since we can help you with filing returns and tax-oriented concerns. We are also helpful when it comes to document logistic management."
Our expertise in dealing with NRI taxation makes us worthy to offer advisories to NRIs on tax return filing. We are constantly handling cases where NRIs have either inherited wealth, bought properties, have shares in India or sold properties. We help them with NRE deposits or assist them with tax filings besides offering consultations to reduce taxes.
It is our experience in the domain followed by our in-depth knowledge of NRI-related services combined with the customized responses that have earned us popularity. It is our passion to grow long-term relationships with our clients that have helped us to stay abreast in the business.
Not just to the local client base, xpertstax offers a complete range of NRI Tax Compliance, NRI services in India for foreign client also. From handling NRI investment-related queries, to provide solutions for setting up business in India, Banking Solutions to assisting returning/emigrating Indians- our NRI Consultancy Services involves all these aspects & many more. Being an experienced NRI Legal Consultant, our dedicated team has successfully provided effective solutions to many foreign clients over the years.
We have experience in providing a multitude of services to diverse client profile as under:-
An Indian residing abroad is popularly known as Non-Resident Indian (NRI). However, the term NRI has been defined in different ways under the Foreign Exchange Management Act, 1999 (FEMA) and the Income Tax Act, 1961(IT Act).
A non-Resident of Indian is a person of Indian origin resident outside India who is either a Citizen of India or a person of Indian Origin is called NRI. RBI has further clarified that students studying abroad are also to be treated as NRIs under FEMA.
Residential status as mentioned above is determined upon number of days a person is physically present in India. It is pertinent to note that person who are “Non-Resident”, “Resident but not Ordinary” and “deemed Resident” are liable to pay Tax only on their India Source of Income whereas a “Resident – Ordinary” is liable to pay tax on its global Income.
As per General provision of the Act, an Individual is said to be Resident in India, in a financial years, if he/she:
Exceptions:
Regulation provide certain concession in number of the days stays in India to Indian citizen , person of Indian origin and Indian citizen who leaves India in any previous year as a crew member or for the purpose of employment outside India. The concession in stays in number of the days are as under:
Meaning thereby , in case of Indian Citizen, person of Indian origin and crew member who left India for employment , instead of checking criteria of 60 days , criteria of 182/120 days need to test .
Resident but not ordinary resident
A person is said to be "Resident but not ordinary resident” in India, if such person is:
If any of the above conditions fulfilled, the person shall be treated as “Resident but not ordinary resident” otherwise “Resident –ordinary resident”.
Deemed Resident
Finance Act, 2020 has inserted a new clause (1A) to section 6 of the Income-tax Act. As per this new clause, an individual shall be deemed to be Indian resident under the new provision only when he is not liable to tax in any country or jurisdiction by reason of his domicile or residence or any other criteria of similar nature and its total Income from other than foreign sources exceeds Rs. 15 Lakh.
PERSON OF INDIAN ORIGIN (PIO)
A Person of Indian Origin (PIO) is simply a person of Indian origin who is not a citizen of India. However, for the purpose of acquisition and transfer of immovable property in India - PIO means a citizen of any country other than Bangladesh or Pakistan or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan if –
Likewise, PIO for the purpose of investment of shares in India / opening non-resident account in India/ remittance of assets, PIO means a citizen of any country other than Bangladesh or Pakistan, if-
RETURNING NRI
A returning NRI would generally be assessed as a Resident (R) but NOR on his return to India. Up to financial year 2002-03, in a given specific situation, a returning NRI was assessed as a R but NOR on his return to India for nine years i.e. income earned on overseas assets or income accruing outside India (unless it is derived from a business controlled in or a profession set up in India) was not taxed in India for 9 years. However, with effect from financial year 2003-04, this particular benefit has been curtailed from nine years to two years i.e. income earned on overseas assets or income accruing outside India (unless it is derived from a business controlled in or a profession set up in India) would now be taxable in India from the third year itself. Accordingly, ‘A’ would now pay tax on his world income sooner than he would have hitherto done.
The impact of R but NOR status is that foreign passive incomes likes interest, dividend, royalty etc. would not be taxable in India in respect of a person who is R but NOR. Even share of profit of a partnership firm or any other business income would not be taxable in India, if the business in respect of which such income arises is not controlled from India. In other words, all foreign sourced income of a R but NOR is not normally taxable in India unless it is derived from a business controlled in or a profession set up in India uptill two years after his return to India.
Income accruing outside India would be taxed outside India as well in most cases in accordance with the tax laws of the foreign country and the Double Tax Avoidance Agreement (DTAA) signed between India and the foreign country. He would be entitled to seek relief under the relevant DTAA i.e. avail credit for foreign taxes paid against income tax paid in India. However there are certain practical difficulties associated with the availing credit for foreign taxes paid such as a possible difference in accounting year of the foreign country and India.
Therefore Immaculate tax planning, in advance i.e. prior to return to India, holds paramount significance for NRIs intending to return to India. An individual who is non-resident for 9 consecutive years, shall remain RNOR for 2 subsequent years and as such his foreign income is not taxable in India while his status is that of RNOR. The status of RNOR renders certain income of such individual non-taxable as explained in Tax liability of NRIs
NRI who return to India for permanent settle in India, should know various aspects of Foreign Exchange Regulations (FEMA), Indian Taxation and Banking Regulations in order to rearrange his financial affairs in India and outside India.
When relocating to India, the following aspects should be taken care of:
Foreign Exchange Management Act, 1999
The Income Tax Act, 1961
In the year of return to India.
In the subsequent years.
NRI LOWER DEDUCTION TDS CERTIFICATE
In the case of NRI, OCI and Foreign Resident on sale of immovable property in India, TDS/Withholding Tax provisions have been specified u/s 195 of Income Tax Act. As per this section rate of TDS is 20% of sale consideration if the property is long term capital assets or it is 30% of sale consideration if the property is short term capital assets. As against such proposition under the law, generally on all property sale transactions actual tax liability of the seller is lesser than the proposed TDS amount. To overcome blockage of funds, with tax department, income tax law provide for lower deduction TDS certificate also known as TDS exemption certificate u/s 197 of the Act. Such certificate can be obtained by way online filing of form No. 13 to the jurisdictional officer alongwith requisite documents such as:-
WHERE WE CAN HELP
TO NRI
TO NRI WHO HAVE / INTENDS TO HAVE INVESTMENTS IN INDIA
For Non resident Indians who have certain investments, property and bank accounts in India, we manage their financial affairs in India in its entirety as follows:
TO NRI WHO INHERIT ASSETS IN INDIA
A NRI inherits assets in the form of investments, property etc in India and intends to either liquidate them and repatriate the sale proceeds of the same or manage the same in most tax efficient manner. We enable him to achieve these objectives by facilitating the clearance from Income Tax, RBI and other regulatory authorities.
TO NRI / NR WHO HAVE/ INTEND TO SET UP A BUSINESS IN INDIA
A NRI/ other non-resident businessman intends to set up business in India. We enable him to do so by providing the following services:
TO RETURNING NRI
TO EMIGRATING RESIDENT INDIAN
An emigrating Indian wants to retain/ disinvest assets (property, investments, and business) acquired in India and repatriate the income/ sale proceeds thereof. We enable them to do so as follows:
BANKING ACCOUNTS
An NRI can have ‘Rupee Account’ or ‘Forex Account’.
Rupee Account can be |
Forex Account can be |
Non-resident External A/c (NRE A/c) |
Foreign currency non-resident A/c (FCNR A/c) |
Non-resident ordinary A/c (NRO A/c) |
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Non-resident (special) rupee (NRSR) account scheme |
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WHERE WE CAN HELP
FAQ’s
Q1 |
Who can purchase immovable property in India? |
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Under the general permission available, the following categories can purchase immovable property in India: |
Q2 |
Can NRI/PIO acquire agricultural land/ plantation property / farm house in India? |
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No |
Q3 |
Are any documents required to be filed with the Reserve Bank after the purchase? |
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No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank |
Q4 |
How many residential / commercial properties can NRI / PIO purchase under the general permission |
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There are no restrictions on the number of residential / commercial properties that can be purchased. |
Q5 |
Can a NRI/PIO acquire immovable property in India by way of gift? Can a foreign national acquire immovable property in India by way of gift? |
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(a) Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from |
Q6 |
Can a non-resident inherit immovable property in India? |
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Yes, a person resident outside India i.e. i) an NRI ii) a PIO and iii) a foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India. |
Q7 |
From whom can a non-resident person inherit immovable property? |
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A person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) can inherit immovable property from : |
Q8 |
Can an NRI/ PIO/foreign national sell his residential / commercial property? |
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(a) NRI can sell property in India to (b) PIO can sell property in India to |
Q9 |
Can a non-resident owning / holding an agricultural land / a plantation property / a farm house in India sell the said property? |
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(a) NRI / PIO may sell agricultural land /plantation property/farm house to a person resident in India who is a citizen of India. (b) Foreign national of non-Indian origin resident outside India would need prior approval of the Reserve Bank to sell agricultural land/plantation property/ farm house in India. |
Q10 |
Can a non-resident gift his residential / commercial property? |
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Yes. |
Q11 |
Can an NRI / PIO / foreign national holding an agricultural land / a plantation property / a farm house in India, gift the same? |
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(a) NRI / PIO can gift an agricultural land / a plantation property / a farm house in India only to a person resident in India who is a citizen of India. (b) A foreign national of non-Indian origin would require the prior approval of the Reserve Bank to gift an agricultural land / a plantation property / a farm house in India |
Q12 |
How can an NRI / PIO make payment for purchase of residential / commercial property in India? |
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Payment can be made by NRI / PIO out of: (a) funds remitted to India through normal banking channels or (b) funds held in NRE / FCNR (B) / NRO account maintained in India No payment can be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above. |
Q13 |
Is repatriation of application money for booking of flat / payment made to the builder by NRI/ PIO allowed when the flat or plot is not allotted or the booking / contract is cancelled? |
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The Authorised Dealers can allow NRIs / PIOs to credit refund of application/ earnest money/ purchase consideration made by the house building agencies/ seller on account of non-allotment of flat/ plot/ cancellation of bookings/ deals for purchase of residential, commercial property, together with interest, if any, net of income tax payable thereon, to NRE/FCNR account, provided, the original payment was made out of NRE/FCNR account of the account holder or remittance from outside India through normal banking channels and the Authorised Dealer is satisfied about the genuineness of the transaction. |
Q14 |
Can NRI / PIO repatriate outside India the sale proceeds of immovable property held in India? |
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In the event of sale of immovable property other than agricultural land / farm house / plantation property in India by a NRI / PIO, the Authorised Dealer will allow repatriation of the sale proceeds outside India, provided the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these regulations |
Q15 |
Can an NRI/PIO repatriate the proceeds in case the sale proceeds were deposited in the NRO account? |
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NRI/PIO may repatriate up to USD 1 million per financial year (April-March) from their NRO account which would also include the sale proceeds of immovable property. There is no lock in period for sale of immovable property and repatriation of sale proceeds outside India |
Q16 |
If the immovable property was acquired by way of gift by the NRI/PIO, can he repatriate abroad the funds from sale of such property? |
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The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD 1 million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes |
Q17 |
Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds? |
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Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for |
Q18 |
Can a person who had bought immovable property, when he was a resident, continue to hold such property even after becoming an NRI/PIO? In which account can the sale proceeds of such immovable property be credited? |
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Yes, A person who had bought the residential / commercial property / agricultural land/ plantation property / farm house in India when he was a resident, continue to hold the immovable property without the approval of the Reserve Bank even after becoming an NRI/PIO. The sale proceeds may be credited to NRO account of the NRI /PIO |
Q19 |
Can the sale proceeds of the immovable property referred to in Q. No. 17 be remitted abroad? |
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Yes, from the balance in the NRO account, NRI/PIO may remit up to USD 1 million per financial year, subject to the satisfaction of Authorized Dealer and payment of applicable taxes |
Q20 |
Can a NRI transfer money from NRO to NRE Account or to home country? |
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Yes, the Reserve Bank of India (RBI) has permitted transfer of funds from NRO to NRE account or home country subject to payment of applicable taxes within the overall ceiling of USD 1 million in a financial year and production of Certificates like 15CA & 15CB from Chartered Accountant |
Q22 |
If an individual of Indian origin staying abroad has to remit some money to his parents in India, will such repatriation of money to India affect the taxability of the parents? |
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Repatriation of money to parents of an individual will not be liable to be taxed in India in the hands of the parents. This is because gifts made to relatives are not taxable as per the Income‐tax Act. |
Q23 |
If a nonresident is willing to invest in the Equity Shares or debentures of an Indian Company by utilizing its foreign currency as a medium of purchase, then are there any specific provisions relating to the taxability of such shares? |
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In case of non‐resident capital gains arising from the sale of shares, or debentures of, an Indian company shall be computed by converting the cost of purchase, and the sale consideration received as a result of sale of such shares and debentures, into the same foreign currency as was initially utilized in the purchase of the shares or debentures, and the capital gains so computed in such foreign currency shall be reconverted into Indian currency. |
Q24 |
Is an NRI/PIO is liable to pay taxes and file its Income Tax Return on Sale of Immovable property in India? |
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Yes, there exist a liability to file Income Tax Return and pay due taxes, if any, arising out of Sale of Immovable property in India. Further, other Income like Interest, rent, dividend, if any, arising in India will also be included in filing Income Tax Return and will be taxed according to Income Tax Act, 1961. |
Q25 |
Whether dividend income earned by a non – resident individual from an Indian Company is taxable? |
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The dividend income earned by a non – resident individual from an Indian Company is taxable in India as per recent amendment in the Act as passed by Indian Parliament in the month of February, 2020. However, rate of taxation of such dividend income will be as per the rate mentioned in DTAA Agreement or tax rates as provided in the Income Tax Act, 1961 whichever is beneficial to the assesse. Generally, the rate of taxation for NRI varies from 5-10% on dividend income. |
Q26 |
How can a NR file his return of income even if he is not physically present in India? |
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As per the provisions of the Income Tax Act, 1961, a non – resident can file his/ her return of income through authorizing another person after executing a power of attorney to sign his/ her return of income on his/ her behalf. However, a non‐resident, even though he/she is not physically present in India, can himself/ herself file return of income by furnishing the same electronically on the website of Directorate of Income Tax by following the procedure mentioned . |
Q27 |
If a Non Resident individual of Indian origin is returning back to India with all his assets including money, then what are the tax implications on his income and assets? |
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If a non‐resident individual is returning back to India then for the purpose of Income Tax his residential status shall be computed as discussed above and accordingly his/her income shall be taxed. |
Q28 |
Is there any withholding tax out of remittance from India? |
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Yes, as per amended Indian Income tax laws funds can only be remitted out of India after withholding Tax either as TDS or TCS (Applicable w.e.f 01.10.2020) as per Rules & Regulations. |
Q29 |
At present rate of withholding tax is 20% + surcharge + cess of gross value of sale consideration of property being sold. Is there any means to reduce rate of withholding tax (TDS) by the buyer of the property? |
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Yes. One can apply to Income tax department for NIL/ Lower deduction certificate. The department after verification of proposed capital gain liability of the seller may direct to the buyer to deduct tax at Nil rate or lower rate. |
Q30 |
Is there any tax planning to reduce to burden on account of capital gain liability being arised on sale of property? |
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Yes. It depends upon various factors like holding period of the property, nature of property inherited or self-acquired & ownership of the property etc. |
Q31 |
Can a NRI sale immovable property in India without visiting India? |
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Yes, NRI can do so by way of executing power of attorney in favor of person residing in India. Such POA must be legalized & appostile in home country & thereafter it must be registered in the state in which the property is located. |
Q32 |
Is the valuation of immovable assets is required at the time of Sale for calculation of capital gain tax? |
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Yes, if the same is purchased before 01.04.2001 or if it acquired by way of gift / will / settlement etc & the original purchaser has purchased before 01.04.2001 |
Q33 |
Can NRI claim credit against such withholding tax against their tax liability if any, in India /abroad? |
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Yes, certainly an NRI can claim credit of such tax in India by way of filing ITR in India. He can also claim credit of such tax in abroad as per applicable DTAA with respective country. Meaning thereby there will not be double taxation of same income in two countries |
Q34 |
Can NRI claim refund of withholding tax if no tax liability is there or the tax liability is lesser than the amount of withholding tax in India? |
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Yes. One can do so by filing tax return in India |
Q35 |
How do NRI get refund of withholding tax - in paper mode or online? |
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Contact xpertstax for NRI Related Services
Contact : xpertstax
Email - xpertstax@xpertstax.com, xpertstax@gmail.com
Telephone Numbers : +91-11-40452748
Mobile Number : +91-8802933545