Today we are discussing on TAXATION OF NON RESIDENT INDIAN (NRI) IN INDIA how tax return filing, tax planning of Non-resident Indian (NRI) in India can be done, types of bank account, taxability of income earned in India, repatriation of money from India, investment in India etc.
Is filing of Income tax Return of Income in India is compulsory?
No, Filing of Income tax return in India is not compulsory, except if his income exceeds Rs 2, 00,000 Per Annam or any Short term capital gain in India if his income is below the exemption limit.
What will be taxability on Purchase and Sale of property in India?
At the time of Purchase of Property – Every Non-resident Indian Should deduct the Tax deduction at source (TDS) @1% and take the Pan card of saler at the time of Purchase of property. If Pan Card of the Saler is not available deduct tax at the rate of 20%.
At the time of Sale of Property – Any Non-resident Indian sale the property Capital Gain tax will be attracted, Short term capital gain @15% if sale the property in less than 3 year and Long term capital gain @ 20% if sale of the property after holding period of more than 3 years.
What are the Types of Bank Accounts for Non-Resident Indian?
There are two types of bank Accounts on Non Resident Ordinary (NRO) and the Non Resident External (NRE) bank Accounts.
Non Resident Ordinary (NRO) Accounts – NRO saving banks accounts is consisting of Money earned in India. An Specific amount can be repatriated for Specific purpose from India to outside india.
In NRE savings bank account is consisting of Money earned in outside India An specific amount would be repatriated to India.
How NRI can invest the money in Indian Company?
An NRI can be Director in an Indian Company and fund the company by way of taking equity shares. An Indian Company have to comply with the ECB Norms for raising money from NRI.
How NRI take and grant the Loan to Indian resident?
Grant of Loan – An Resident Indian Individual can accept the Loan of USD 2,50,000, the minimum maturity will be one year and it should be interest free.
Accepting the Loan – An Resident individual can grant the total amount (Gift made, loan, money sent abroad for any other purpose) to NRI USD 1,25,000
How NRI take and grant the Gift to Indian resident?
An NRI can accept the gift from the relative in India, However a maximum cap has been fixed for the Resident Indian of USD 1,25,000 (Gift made, loan, money sent abroad for any other purpose).It is advisable; NRI should check the tax provision in his country.
An NRI can give the gift to his relative in India any amount.).It is advisable; NRI should check the tax provision in his country.
Which income is taxable India?
NRI has to paid the tax on any Income received or deemed to be received in India or Any income Accrue or deemed to be accrued in India,
Are there any tax benefits available to an NRI in India?
Following income is exempt for the NRI:-
Dividend income earned from equity share and tax free mutual fund.
Interest received on NRE Accounts
Income from long term capital gain on sale of equity shares, equity mutual fund if you pay Security transaction tax at the time of sale.
Income earned from renting of immovable property 30% deduction on gross rent received.
Interest payment of Home loan up to Rs 1, 50,000 if self occupied or vacant and if let out amount of interest paid.
Health insurance premium up to Rs 15,000 u/s 80D of Income tax act,1961 for yourself and dependent and An additional benefits of Rs 15,000 is available for health insurance of parents, If age of parents is more than 65 years you can avail the benefits of Rs 20,000.
Investment in LIC and PPF up to Rs 1,50,000 u/s 80C of income tax act, 1961.
How Repatriation of money from India?
An NRI can repatriate current income amount without any limit on any income earned in India by way of Dividend, interest, rent, mutual fund, profit from business or profession etc.
Any income earned in India by sale of immovable property NRI can repatriate Upto USD 1 million in a financial year. Except If the NRI has made the investment in FOREX from his NRE Accounts
