Investments in India from overseas taxable
I’ve been residing within the UAE for the previous seven years and have non-resident exterior (NRE) accounts in India. Recently, my household shifted again to India completely, whereas I’ll proceed to work within the UAE as an NRI. Given this case, is it authorized if I spend money on authorities funding choices similar to RBI floating price bonds, sovereign gold bonds, Sukanya Samriddhi Yojana and Kisan Vikas Patra by way of my spouse’s Indian accounts by transferring funds from my NRE account to her Indian account? Are there limits on switch of funds from an NRE account to an account in India for funding functions? What would be the tax implications?
—Name withheld on request
Under the trade management regulation, the permissible debits to an NRE account are native disbursements, remittance outdoors India, switch to different NRE/ Foreign Currency Non-Resident Account (B) [FCNR(B)] accounts and investments in India. Accordingly, chances are you’ll switch funds to your spouse’s regular resident account. Your spouse can spend money on eligible investments in India from her account. Under revenue tax legal guidelines in India, revenue earned from eligible investments in India will likely be taxable in your palms in India if these are held in your title. Even in case your spouse has made the investments from the funds you offered, will probably be taxable in your palms owing to clubbing provisions.
My son, an Indian citizen aged 41, has been a member of the workers’ provident fund (EPF) and workers’ pension scheme (EPS) since January 2013 when he was posted to work in Bengaluru from the US. From January 2022, he will likely be posted in Singapore. Consequently, contributions to EPF and EPS will stop. Can the complete contribution (together with the employer’s portion) to EPF and EPS be claimed on this occasion?
—Name withheld on request
As per Para 69 of the Employees’ Provident Fund Scheme, 1952, an worker (Indian nationwide) is eligible to withdraw from EPF underneath the next circumstances: On retirement from service after attaining the age of 55 years; on retirement on account of everlasting and complete incapacitation; on migration from India for everlasting settlement overseas; and on being unemployed in India for greater than two months. Similarly, Para 14 of the Employees’ Pension Scheme, 1995, says an worker (Indian nationwide) is eligible to withdraw from EPS if he/she has not rendered service of 10 years or extra on the date of cessation of employment. But, the worker will likely be entitled to withdrawal profit as per Table D of EPS or might decide to obtain scheme certificates. If an worker has rendered service of 10 years or extra, he/she will likely be eligible for month-to-month pension from EPS. In your son’s case, he might withdraw from EPF and EPS on termination of Indian employment after two months. As he has rendered steady service of 5 years or extra in India, the withdrawal of collected stability updated of cessation of employment in India received’t be taxable in India.
Sonu Iyer is tax accomplice and folks advisory providers chief, EY India.
Subscribe to Mint Newsletters * Enter a sound e mail * Thank you for subscribing to our publication.
Never miss a narrative! Stay linked and knowledgeable with Mint.
Download
our App Now!!
