My son is predicated in London for the previous 12 years . He was an NRI and has earnings in India from NRE deposits and mutual funds. He has been often submitting IT returns which have been assessed updated. He has now obtained British citizenship and has utilized for OCI standing.
Will he get the indexation advantages as per Indian tax legal guidelines on his MF earnings? How does the Double Taxation Avoidance Treaty with UK apply?
He is working in UK and TDS is being deducted from his wage. What is the shape and the process to be adopted for submitting tax returns as an OCI for Indian earnings tax?
Does he should declare his monetary property to the UK tax authorities? Will his PAN and Aadhar numbers nonetheless be legitimate as an OCI?
– Name withheld on request
As your son is predicated exterior India, he would qualify as “Non Resident” of India beneath the next circumstances:
a. His bodily presence in India is lower than 60 days throughout the related monetary 12 months;
b. His bodily presence in India is lower than 120 days throughout the related monetary 12 months if India sourced earnings doesn’t exceed ₹1,500,000; or
c. His bodily presence in India is lower than 182 days throughout the related monetary years if India sourced earnings lower than ₹1,500,000.
On the sale of mutual funds in India, he can be eligible for indexation profit in case of long-term capital positive aspects in case of mutual funds apart from equity-oriented mutual funds.
Double Taxation Avoidance Treaty: Benefit could also be claimed beneath the Double Taxation Avoidance Agreement (DTAA) between India and the UK if there’s double taxation of any earnings in India and within the UK. The profit might be both of the next :
(a) Exemption of earnings
(b) Lower fee of tax or
(c) Credit for taxes paid within the different nation.
There isn’t any separate process to be adopted for submitting tax returns in India as an Overseas Citizen of India card (OCI) holder. He can proceed submitting returns in India as a non-resident. Further, his PAN and Aadhaar are legitimate as an OCI.
Sonu Iyer is tax accomplice and other people advisory companies chief, EY India.
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