Tag: PIO

How are NRIs taxed on abroad earnings in Indian accounts?

I labored in Australia on a brief lived venture for 7 months. I earned in Australian {{dollars}} all through that time and the earnings was credited to my checking account in India. How must I file my earnings tax return since I’m once more in India?

—Name withheld on request

To find out how your earnings will be taxed, you will have to first arrange your residential standing as per the Income Tax Act for each fiscal yr. For FY23, this can be achieved in case you meet any of the subsequent circumstances and every the additional circumstances:

a) You are in India for 182 days or additional throughout the FY; and b) you is perhaps in India for 60 days or additional throughout the FY and twelve months or additional throughout the 4 FYs immediately earlier the associated FY.

In the above state of affairs, the interval of 60 days is substituted by 182 days for a citizen of India or a person of Indian origin (PIO), who lives exterior India and involves go to India throughout the talked about fiscal yr. The an identical applies for a citizen who leaves India throughout the talked about fiscal yr for the intention of employment exterior India or as a member of a crew of an Indian ship.

An explicit one that’s a citizen of India and by no means liable to tax in each different nation or territory has full earnings, other than from abroad sources, exceeding ₹15 lakh in the midst of the talked about FY, shall be a deemed resident of India.

For a citizen or a PIO who comes on a go to to India, if full earnings, other than earnings from abroad sources, exceeds ₹15 lakh the 60 days are substituted by 120 days; in each different case, the 60 days are substituted by 182 days. Such people are regarded as deemed residents.

Additional circumstances: you are a resident in India in two of the ten FYs immediately earlier the associated FY; and also you is perhaps in India throughout the seven years immediately earlier the associated FY for 729 days or additional.

Archit Gupta is founder and chief authorities officer, Clear.in.

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April 10, 2023
All you wish to find out about Foreign Currency Non Resident (FCNR) account

The long run and chronic depreciation in Indian Rupees leads to, international foreign money denominated funding merchandise, typically giving increased returns by way of Indian rupees over time. In addition to actual property and Indian fairness funding in India, Foreign Currency Non Resident (FCNR) account additionally affords a protected and liquid funding alternative to NRIs. Let us focus on numerous options of FCNR account.

Basic options of the account

The FCNR account can solely be opened as a set deposit and solely in “permitted foreign currency” freely convertible in Indian rupees. These include various foreign currencies like Pound Sterling, US Dollar, Canadian Dollar, Australian Dollar, EURO and Japanese Yen etc.. These accounts can be opened for a period between one year and five years. In case of premature withdrawals, you have to pay penalty in terms of reduction in the interest rate which you will get. However, in case the deposits under FCNR are liquidated before completion of one year, no interest is payable.

Loan can be taken against FCNR deposits for personal or business needs but not for the purpose of onward lending or for acquiring agricultural land or for any real estate business. However you can use the money for acquiring any flat or house for your own residence in India.

Who and how of opening of FCNR account

Any person who is an Indian Citizen and a non-resident under FEMA can open an FCNR account. Moreover, non-Indian Citizen and Person of Indian Origin are also allowed to open the FCNR account. Both these categories of persons are collectively referred to as NRI under FEMA. The FCNR account can be opened in single or joint names but in case of joint account the joint holder also needs to be an NRI. Your relatives are allowed as joint account holder on “former or survivor basis”. Like different financial institution accounts, you’ll be able to appoint nominee in your FCNR account and the nominee needn’t be an NRI. The FCNR account may be opened with cash transferred in international foreign money by way of banking channel exterior India or by switch out of your NRE account or another FCNR account or by means of a cheque drawn on any checking account maintained in international foreign money. It can be opened by tendering traveller cheques or international foreign money whereas travelling to India.

It is just not obligatory so that you can be bodily current in India for opening an FCNR account. The NRIs can open this account within the abroad department however have to submit some fundamental paperwork like copy of passport, proof of international handle and so on.

Interest fee and Exchange fee

The fee of curiosity for FCNR account for every of the foreign money is completely different. The rate of interest on FCNR account is mostly decrease than the speed for deposits of Indian residents. However, the speed of curiosity on the FCNR accounts is mostly increased than provided of their nation of residence. Since these accounts are opened in international foreign money, there isn’t any danger as a result of modifications within the trade fee of the foreign money of the deposit and Indian foreign money. As the trade fee danger is eradicated and the speed of curiosity provided is increased than these provided by their dwelling international locations, these deposits supply a greater danger free funding alternative to the NRIs. The curiosity credited in FCNR account and the principal quantity in FCNR account is totally repatriable and may be freely remitted exterior India with none permission from RBI. The curiosity can be credited to your NRE or NRO account.

Taxation of the curiosity on FCNR

The curiosity on FCNR account is exempt from tax in India however could also be taxable in nation of your residence relying in your residential standing beneath the nation of your residence. In case you change into a resident beneath FEMA, if you return again to India for good, the curiosity on FCNR account will nonetheless be exempt until the maturity of the FCNR account. This is in distinction to the curiosity on NRE account which stays tax exempt until you’re a non-resident beneath FEMA and turns into taxable instantly on turning into resident beneath FEMA.

Balwant Jain is a tax and funding knowledgeable and may be reached on [email protected] and @jainbalwant on Twitter.

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First article

September 15, 2022
OCI and PIO cardholders can now visit India as visa restrictions eased

In view of the situation arising out of the COVID-19 pandemic, the Government of India had taken a series of steps to curtail the inward and outward movement of international passengers since February 2020.

The Government has now decided to make a graded relaxation in visa and travel restrictions for more categories of foreign nationals and Indian nationals who wish to enter or leave India. Therefore, it has been decided to permit all OCI and PIO cardholders and all other foreign nationals intending to visit India for any purpose, except on a Tourist Visa to enter by air or water routes through authorized airports and seaport immigration check posts.

This includes flights operated under Vande Bharat Mission, Air Transport Bubble arrangements or by any non-scheduled commercial flights as allowed by the Ministry of Civil Aviation. All such travellers will however have to strictly adhere to the guidelines of the Ministry of Health and Family Welfare regarding quarantine and other health/COVID-19 matters.

Under this graded relaxation, Government of India has also decided to restore with immediate effect all existing visas (except electronic visa, Tourist Visa and Medical Visa). If the validity of such visas has expired, fresh visas of appropriate categories can be obtained from Indian Mission/Posts concerned. Foreign nationals intending to visit India for medical treatment can apply for a Medical Visa including for their medical attendants.

Therefore, this decision will enable foreign nationals to come to India for various purposes such as business, conferences, employment, studies, research, medical purposes etc.

October 22, 2020