Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

TAX & REPAT BONANZA FOR NRIs!

With RBI allowing free transfer of funds from NRE to NRO Accounts, NRIs can plan tax exemption & easy repatriation!

                         In the past decade, the Reserve Bank of India (RBI) has granted liberal facilities to Non-Resident Indians (NRIs), not only for repatriation of their current income earned in Indian Rupees, but also for remittances for specified purposes and substantial repatriation out of their Non-Resident Ordinary bank accounts. 

                         For the above purposes, an NRI would in fact mean not only an Indian National Resident outside India, but also a Foreign National of Indian origin who is a Non Resident i.e. Persons of Indian Origin (PIOs).

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BANK ON TERM DEPOSITS FOR AVAILING TAX SAVING

Investing in the ‘Tax Saving Deposit Scheme’ can be a great choice for NRIs & HUFs who cannot invest in PPF!

              The Finance Act, 2006 enlarged the scope of investments and allocations eligible for deduction under Section 80C of the Income-tax Act through the inclusion of ‘a term deposit for a period of 5 years or more in accordance with a scheme framed by the Central Government.’  Pursuant to this, the ‘Bank Term Deposit Scheme, 2006’ was announced vide Notification No.203/2006 dated 28th July, 2006. (more…)

GLOBALISE YOUR INVESTMENTS!

Sell a Land in Ahmedabad & Enjoy Tax Exemption

Via Investment of an Apartment in London!

It may appear too good to be believed, but it is true! With the Foreign Exchange Management Act (FEMA) having liberalized remittances by resident Indians for their annual overseas investments upto US $ 2,00,000 and with the Income-tax Act enabling tax exemption of long term capital gains (LTCG) in case of an investment made in either the purchase or construction of a residential house, you can now plan to sell your land in Ahmedabad and invest funds even in a London apartment so as to enjoy tax holiday. (more…)

NRIs CAN FEEL AT HOME!

Liberalized Regulations For Acquisition, Transfer & Repatriation For Immovable Properties Held By Non Residents

Thousands of Non Resident Indians (NRIs) settled overseas fly frequently to India, the home of their hearts. Many of them yearn to have a land or house of their own in their native land, either for future settlement or even to share rental gains or just property appreciation. There are those who have come to acquire properties either by way of gifts or inheritance and desire to sell them and repatriate the proceeds overseas. Today’s article deals with FAQs on the liberalized regulations in this regard. (more…)

DTC TREATS NRIs AS ‘NOT REQUIRED INDIANS’

Harsh Taxing Provisions & Tinkering with Residential Status

under the Code are bound to irk the Global Indian Community!

Amrish Amin, a Non Resident Indian (NRI) settled in U.K. earns interest income of Rs.3 lakhs on his Non Resident Ordinary (NRO) Account Bank Deposit in India in the current FY 2010-11. Enjoying his personal exemption limit of Rs.1,60,000 and the eligible deduction of Rs.1,00,000 under Section 80C, Amin is comfortable paying income-tax of Rs.4,000 in the first slab of 10% on his effective taxable income of Rs.40,000.

A huge shock awaits Amin and some millions of NRIs, in regard to taxation of their interest and income from non-Equity Oriented Funds earned in India, proposed to be treated under the draft Direct Tax Code as ‘income from special sources.’

In 2012-13, on the same interest income of Rs.3 lakhs, Amin will be required to pay a hefty tax of Rs.60,000 at the flat rate of 20%, without being eligible to claim any basic exemption or other deduction, as provided under Part III of the First Schedule to the Code.

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Indian Properties in NRI Comfort Zone!

Liberal Regulations For Acquisition, Transfer & Repatriation

For Immovable Properties Held By Non Residents

Thousands of Non Resident Indians (NRIs) settled overseas fly frequently to India, the home of their hearts. Many of them yearn to have a land or house of their own in their native land, either for future settlement or even to share rental gains or just property appreciation. There are those who have come to acquire properties either by way of gifts or inheritance and desire to sell them and repatriate the proceeds overseas. This FAQ presentation on the liberal regulations in this regard will prove handy and useful both for NRIs and their relatives in India.

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NRIs treated as Not Required Indians

Harsh, Illogical & Discriminatory Taxing Provisions For NRIs!

Proposals That Will Hurt The Global Indian Sentiment

Flat Rate of Tax

  • 20% flat tax on interest & other investment income.
  • 30% flat tax on all capital gains.
  • Apart from 20% & 30% TDS on above, TDS at a baffling rate of 35% prescribed on all residual income.

No Personal Exemption

  • No personal exemption or deduction allowed in computing the above income treated as ‘income from special sources.’

Weird Interpretation

  • Poor drafting leads to such a weird interpretation that transfer of a capital asset may attract 30% tax on gross sale consideration.

What a Discrimination?

  • Ironical but true! Non-Indian sports-persons, say Ricky Ponting or Shoaib Akhtar, required to pay a concessional tax of 10% on their game, advertisement and column earnings in India, thus enjoying a more privileged tax status than our own sons of the soil living abroad.

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