What are earnings tax guidelines on PPF maturity proceeds whenever you transfer overseas?
I’ve moved to Singapore. I had invested in life insurance coverage insurance policies, NSC, PPF and fairness mutual funds schemes after I was in India. Are the maturity/sale proceeds of those investments taxable?
Answer: The tax legal responsibility for the funding merchandise talked about by you is identical whether or not you’re a resident or a non-resident. The maturity proceeds of a life insurance coverage coverage are tax free below Section 10(10(d) if the premium paid for the life insurance coverage coverage didn’t exceed 10% of the sum assured throughout any of the premium paying years.
The maturity proceeds of PPF account are totally tax free in your fingers. However, you aren’t allowed to increase the tenure of your PPF account past its unique tenure of 15 years. In case the identical was already been prolonged when you have been in India, you can’t lengthen it past the operating extension interval of 5 years.
The earnings made on fairness oriented mutual funds schemes are taxed at flat 15% if redeemed inside a one yr. If the funding in fairness schemes is held for a couple of yr, the identical are handled as long run capital good points. On long run capital good points on fairness schemes together with long run capital good points on listed shares you get an exemption for preliminary one lakhs rupees and past that the identical are taxed at flat charge of 10% with none indexation advantages.
The curiosity on NSC might be provided for tax both on receipt foundation or accrual foundation. In case you provide it for tax on accrual foundation, you get the deduction below Section 80C for curiosity accrued on NSC for all of the years aside from the yr during which it matures because the curiosity accrued is presumed to have been reinvested.
Balwant Jain is a tax and funding knowledgeable and might be reached at [email protected]
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