|
In between, I came to USA for project
purposes but my USA visit was made via India. Because I
couldn't get visa from Switzerland to US. I stayed in India
for six days to get US B1 Visa.
I would like to ask you following
things:
"Am I a NRI, taking into consideration
that I was in India for 5-6 days".
If I transfer money to India, is the income earned in Switzerland
taxable?
If I transfer money to India, is the income earned in USA
taxable?
If I visit India after some time, convert Dollars into Rupees
and then deposit it into a savings account in India, will
it be objectionable?
I am very curious about these issues and would like to get
answers for the same.
--- Pradeep Sardesai,
USA
|
|
Q3: I
moved to the UAE in Jan. 2000. I have invested in shares
besides earning rental income in India. How will the dividends
on shares be treated after having become an NRI? I also
want to sell some of these shares and shift to scrips. What
are the tax implications? All my holdings are long-term
in nature.
--- Padmakumar Pillai,
U.A.E.
|
|
Q4:
I am a software engineer working in CA,USA. I came here
on 24th Nov. 1999. Will I be considered as a NRI? If not,
then what is my status (NRE, NRNR, RFC, FCNR)?
--- Sanjay, USA
|
|
Q5: I
want to know about the Estate Tax in India. Is it different
for assets in India and assets outside India? Will all the
assets be considered as a whole for calculation? What are
the tax rates? How and what methods can be used to minimise
/ eliminate this. Is there any other relevent information
that can help in planning for this well in advance. Any
reading suggestions, etc.?
--- Vinesh Kumar Tanwar,
UAE
|
|
|
| Q1: How
can a NRI avoid TDS on the interest earned in NRO account
and which forms have to be submitted to the bank (assuming
income is not taxable).
|
| A1: There
are excellent avenues open to NRIs to park non-repatriable
funds. They can invest in shares where the dividend is tax-free.
Open-ended equity-based dividend schemes of UTI / MF's as
well as US-64 of UTI also enjoy freedom from tax until 1.4.92.
Those who are averse to the market-related risks should go
in for the debt-based schemes of UTI/MF's where the dividend
is also tax-free in the hands of the investor but should be
avoided in view of the fact that it suffers from dividend
tax of 22% at source. The growth-based schemes attract capital
gains which are subject to TDS for all MF's. However, UTI
does not apply TDS so far even on such schemes since it is
covered by UTI Act and not by SEBI Act.
Now, coming to the main query. One
can ensure that TDS is not applied at source by adopting
the following measures :
1. You may make an application u/s
195(3) to your ITO in Form-15D requesting for grant of a
certificate authorizing you to receive income (not being
salary and interest on securities) without TDS. If the ITO
feels that it is a deserving case for such a favour, he
will issue a certificate in Form-E. This certificate will
be valid for the period specified by him in the Form or
till it is cancelled by him.
2. In case you earn interest, other than interest on securities,
you may give a declaration in duplicate u/s 197(A1A) in
Form 15-H to the company paying you interest stating that
the tax on your total income including the interest on other
than interest on securities, computed in accordance with
the provisions of the Act, (meaning, after claiming all
the exemptions and rebates) for the year will be nil.
I have given you the details because you asked for them.
Let me warn you. All this is riddled with hassles. I entreat
you to avoid investing in any avenues which are expected
to aptly TDS by chalking out a strategy based on the data
given by me hereinabove. If there are strong reasons for
you to invest large sums in NRO accounts, let the bank merrily
apply TDS. File the tax returns and claim the refund.
Very simple indeed!
Top
|
| Q2: I
left India for a 3-month training programme in Switzerland
on 20th Feb. 2000. Initially my visa was till 20th May 2000.
Then I got the work permit of Switzerland till 6th Aug. 2000.
In between, I came to USA for project
purposes but my USA visit was made via India. Because I
couldn't get visa from Switzerland to US. I stayed in India
for six days to get US B1 Visa.
I would like to ask you following
things:
"Am I a NRI, taking into consideration
that I was in India for 5-6 days".
If I transfer money to India, is the income earned in Switzerland
taxable?
If I transfer money to India, is theincome earned in USA
taxable?
If I visit India after some time, convert Dollars into Rupees
and then deposit it into a savings account in India, will
it be objectionable?
I am very curious about these issues and would like to get
answers for the same.
--- Pradeep Sardesai, USA
|
| A2: Being a trainee, you are not an
NRI from FERA point of view. Having been in India for more
than 182 days, you are not an NRI either for 99-00 or for
00-01. FEMA will be replacing FERA on 1.6.00. However, in
your case, the answer does not change.
Please read FAQ 00 and FAQ 12 for further details.
Top
|
|
Q3: I
moved to the UAE in Jan. 2000. I have invested in shares
besides earning rental income in India. How will the dividends
on shares be treated after having become an NRI? I also
want to sell some of these shares and shift to scrips. What
are the tax implications? All my holdings are long-term
in nature.
--- Padmakumar Pillai, U.A.E.
|
| A3: The first and most important thing
to do is to inform all the companies, banks, institutions,
etc., wherever you have investments about your change in status.
It is also necessary to inform RBI.
The dividend is tax-free and straightaway repatriable.
Your bank can help you in the necessary paperwork. The capital
gains are also repatriable after you pay tax thereon or
correct tax is deducted at source. The original capital
however, is not repatriable in any case, as of now.
Top
|
|
Q4: I am a
software engineer working in CA,USA. I came here on 24th
Nov. 1999. Will I be considered as a NRI? If not, then what
is my status (NRE,NRNR,RFC,FCNR)?
--- Sanjay, USA
|
| A4: Having gone outside India for employment,
you are a NRI for FERA (as well as FEMA), but you are very
much a Resident for Income Tax during FY 99-00. Your foreign
income is taxable for FY 99-00 but you are eligible for DTAA
between India and the USA.
Top
|
|
Q5: I
want to know about the Estate Tax in India. Is it different
for assets in India and assets outside India? Will all the
assets be considered as a whole for calculation? What are
the tax rates? How and what methods can be used to minimise
/ eliminate this. Is there any other relevent information
that can help in planning for this well in advance. Any
reading suggestions, etc.?
--- Vinesh Kumar Tanwar,
UAE
|
| A5: I hope I am not misunderstanding
you. Estate Duty is levied on the estate of a person after
his demise, before it is distributed amongst his legatees.
Estate Duty has been abolished in India w.e.f. 16.3.85.
I feel what you have in your mind is wealth tax. This also
stands virtually abolished. There is no tax on productive
assets. This means that all your business assets, including
industrial estates owned by you are free from wealth tax.
Again, all your investments in shares, banks, etc., are
considered as productive assets. Similarly, there is no
wealth tax on a residential house, irrespective of its size.
You do not have to worry about wealth tax, unless you have
cars, jewellery, houses, aeroplanes, yachts, etc., of over
Rs. 15 lakhs.
Top
|
Copyright 2002. ICICI
Bank NRI Services
Terms
and Conditions | Disclaimer
|