Income Tax Planning by an NRI Returning to India permanently

[Basic Aspects Of Tax Planning For NRIs]

An NRI can enjoy complete exemption from income-tax while remaining an NRI and thus, he need not pay any income-tax under the Income Tax Act in India. However, NRIs deciding to return to India on a permanent basis are often perplexed as to the tax planning to be adopted by them to be able to have zero income tax level for their earnings in India. One important point that should be remembered by an NRI returning to India on a permanent basis is that his income, like interest on nonresident (external) account which was completely exempt when he was an NRI would no longer be so exempt when he returns to India. However, in respect of his foreign income on the investment allowed by the RBI to be kept abroad, he would not be liable to tax in India so long as he remains a resident but not ordinarily resident in India. But if an NRI carries on any business abroad while remaining a resident in India, he would not be liable to tax thereon in India. However, a zero tax liability can be obtained by an NRI returning to India on Indian income by adopting proper tax planning in respect of his investment in his name as well as in the names of his family members.

 

One important aspect that should be taken care of by a returning NRI is that there should be sufficient investment in the names of the spouse and major children. Besides, a new file in the name of Hindu undivided family can also be started by the returning NRI. The investment should be made in each of the files in such a manner that the amount of taxable income is kept below exemption limit, which is ` 2,50,000 for an individual male and female for the Assessment Year 2015-2016. Every returning NRI must adopt tax planning carefully so as to avoid clubbing of the income of his spouse or daughter-in-law or minor children with his income. Likewise, an NRI can make investments through the help of well- known brokers in shares of reputed companies so that there is security along with liquidity of investment and the dividend income is eligible to exemption under Section 10(34) . The investment may also be made in mutual funds as the income from mutual funds is exempt from tax.

If there is any taxable income, say on account of rental income or investment in non-banking deposits, etc., then the tax incidence can be reduced through investments in PPF, NSCs, Life Insurance premium, specified and notified infrastructure bonds, units, etc. under Section 80C where deduction from income is allowed upto maximum investment of ` 1,50,000 per tax-payer

 

Where an NRI is interested in having a house, he can invest his funds in the purchase or construction of a self-occupied residential house, the income of which will be nil for income tax purposes. Further, he can even borrow moneys from his relative and get a deduction on interest upto `. 1,50,000 every year from any other taxable income. The above account of tax planning to be adopted by an NRI gives the most important aspects of tax planning to achieve a zero income tax level.
 
 

Basic Aspects Of Tax Planning For NRIs !

1. The Direct Tax Laws which affect NRIs
2. Incomes of NRIs liable to Income Tax
3. How to Compute the Taxable Income of a Non-Resident Indian (NRI)
4. Income Tax Planning by an NRI Returning to India permanently
5. Wealth Tax Liability of an NRI ?

 

 
 
 
GST (India)
F.A.Q. on GST
GST Forms Download
GST Compensation Law
GST Enrollment Process
GST Law & Act.
GST Rules
GST Schedule ( I to V )
IGST Law & Act.
GST A Practical Knowledgebase
Filing GST Return
Enroll & Registration with GST
GST Office Tool to File GST Return
LIBRARY @ Tax Management
TAX & INVESTMENT GUIDE FOR "NRI"- Non-Resident Indians !
GUIDE & FAQ @ TAX
GRAPHICAL PRESENTATION @ TAX
TIPS & TRICKS @ TAX
MANAGERIAL & FINANCIAL DECISIONS @ TAX
5 GOLDEN RULES OF TAX PLANNING
FAMILY TAX PLANNING
DEDUCTIONS FROM YOUR INCOME
EXEMPTED INCOMES
HUF - FORMATION, MANAGEMENT & TAX PLANNING
COMPUTATION OF GROSS TOAL INCOME
INCOME TAX @ GLANCE
MULTIPLE KNOWLEDGEBASE ON TAX
51 TIPS ON TAX PLANNING
APPEALS UNDER INCOME TAX
ASSESSMENTS
PENALTIES UNDER IT DEPATMENTS
TAX SAVING SCHEMES
TAX READY RECKONER
TAX RATES
PROSECUTIONS UNDER INCOME TAX DEPARTMENT
TAXATION SYSTEM IN INDIA
CHARITABLE & RELIGIOUS TRUST - TAXATION
PRESCRIBED FORMS WITH with Section / Rules
 
TAX @ KNOWLEDGE BASE !

Most Popular Links :

Clubing of Income Deduction U/s 80C
Allowances Us-17(3) Exemption-Salary
Tax Amendment-2015 Taxable Income
Clubing of Income Tax Deductions
HUF Deduction HUF Investment
Gift by HUF HUF Tax Planning Tips
Tax Saving Schemes Tax Planning Tips
Refund of Tax Fringe Benefit Tax-FBT
Return Filing Assessment / Scrutiny
Notice from I.T. Dept. Incomes Types @ TDS
Exemptions-Tax Returns “Summon” U/s 131
'Black Money' @ I.Tax Big Gifts To Be Taxed
'Appeals' under I.Tax Assessment @ I.Tax
Exempted Incomes Capital Gain
Business & Professions House Property
Salaries @ I.Tax Partnership Firm
'Penalty' under I.Tax Act. Tax Ready Reckoner
Charitable Trust Useful Links @ I.Tax
 
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
Charitable & Religious TRUST NRI (Tax Planning,Saving,Investemnt) Tax Tutorials GST (FAQ, Law, Act. Rules, Schedule, Enrollment)
FAQs - Income Tax India    

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications

Tally.ERP9 Book Online Order Tally.ERP9 Book Content