NRI Tax Services

Recent - NRIs / Immigrants

All those individuals who leave India for good are required to complete certain formality in relation to their financial affairs in India. This is explained as under:

Foreign Exchange Management Act

A. INDIAN ASSETS:

All kind of assets in India such as properties, bank deposits, stocks and securities, life insurance policies, loans, company deposits, debentures, bonds etc. acquired, held or owned by an NRI while he was in India can be continued to be so held and deal in any manner even after the NRI’s leave India for permanent settlement.
A Recent Immigrant, on his leaving India has to deal with his various accounts in India in the following manner:

(a) Banking A/cs (In India).


Sr.No.	Banking Accounts Available for NRI’s	Treatment to be given
1.	NRO Savings Bank Account	Designate the Normal Savings Bank Account to NRO Savings Bank Account.
2.	NRE Bank Account / FCNR Deposit Account	Can be opened and maintained only after becoming a Non Resident Indian.

(b) Shares, Debentures, Bonds, Units of Mutual Funds,etc
A Recent Immigrant is required to inform all the companies, funds etc. as to change of residential status from Resident to NRI.

(C) Business in India
RBI has given general permission to NRIs to invest on Non-Repatriation basis by way of Capital Contribution in any Proprietory or Partnership concerns engaged in any industrial, commercial or trading activity in India subject to the provision of FEMA. However, the firm or proprietary concern should not be engaged in any agricultural/plantation activity or real estate business.

Repatriation
NRIs are eligible to repatriate Income earned in India from rupee assets held in India.

Other Points
Any payment or receipt of funds from Residents should be in accordance with the provisions of FEMA i.e.

Providing guarantee to any person
Taking loans from any person
Acquisition of shares and securities
Granting loans and advances

INCOME TAX COMPLIANCES

Income-tax Authorities
NRI shall Inform the Income-tax Authorities about change in his/her residential status within the meaning of the Income-tax Act,1961.

Tax Liability
The Provisions of the Income Tax Act, would apply as applicable to a Non Resident Indian. If NRI receives any Income from any person, the tax is required to be deducted at source at a rate applicable to NRI's. He should inform the payer that his residential status under the Income Tax Act is that of Non-Resident.

The following are the tax rates applicable to a Non Resident Indian.


Sr.No.	Type of Assets			Tax Liability	Rate of TDS
1.	Interest on Banking Account
	a.	NRO Savings Bank Account		Taxable	31.5%
	b.	NRE Bank Account		Exempt	Nil
	c.	FCNR Deposit Account		Exempt	Nil

2.	Immovable Property
	a.	Capital Gains
		i.	Long Term Capital Gains	Taxable	33.99%
		ii.	Short Term Capital Gains	Taxable	Slab Rates
	b.		Rental Income	Taxable	33.99%

3.	Shares, Units of Mutual Fund
	a.	Capital Gains
		i.	Long Term Capital Gains	Exempt	Nil
		ii.	Short Term Capital Gains	Taxable	16.995%
	b.		Dividend Income	Exempt	Nil

Aspects to be kept in mind by Recent Immigrants

A Recent Immigrants needs to plan his departure out of India. For the purpose, he needs advice / information on various aspects of Tax Laws / FEMA, 1999. We can guide on the issues such as:

1)	What is the residential status in the year of departure under:
	i. Foreign Exchange Management Act, 1999 ii. The Income Tax Act, 1961

2)	Planning the date and month of departure out of India so as ensure minimum tax liability in the year of departure (i.e. April to March)?

3)	Taxability of Income earned in and outside India.
	a. In the year of departure out of India. b. In the subsequent period.

4)	Application of Double Taxation Avoidance Treaty, if any applicable

5)	Advice / information on various aspects of Tax Laws / FEMA, 1999 in respect of holding of assets in and outside India / earning income in and outside India and its taxability?

6)	Assistance in Filing Return of Income in India for the income earned in and outside India.