We are planning to maneuver to Australia. We have investments in FDs, PPF, EPF, mutual funds, shares and liquid funds. Do we have to now make investments these devices in a non-resident exterior (NRE) or non-resident abnormal (NRO) account or can we allow them to proceed until maturity?
— Name withheld on request
Under the change management regulation, when a person leaves India for employment or enterprise or for vocation exterior India or for every other objective indicating his intention to remain overseas for an unsure interval, his present resident checking account needs to be designated as an NRO account. An NRE account could also be opened afresh. The residential standing beneath the change management legal guidelines is totally different from that beneath the income-tax legal guidelines.
Thus, you’re required to transform your present resident (saving and stuck deposit) financial institution accounts to NRO account.
As a non-resident Indian, the PPF account could also be continued until its maturity on non-repatriation foundation (no remittance exterior India) and the account will probably be closed on maturity. For mutual funds and shares, you have to to tell the change of residential standing to the fund home and Indian firm, respectively.
My son lives in Canada and sends ₹25,000 each month to his mom for paying the month-to-month installment of a automobile mortgage. Is this quantity taxable? Also, does my spouse want to indicate or declare this in her Income Tax Return (ITR)?
— Name withheld on request
Under the India income-tax (I-T) Act, the funds remitted from exterior India by a son to the financial savings account of his mom in India won’t have any income-tax implications in India. As the switch will not be taxable in India, there isn’t a requirement to report the identical within the ITR in India.
Sonu Iyer is tax associate and folks advisory companies chief, EY India.
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