Tax Guide for NRI - Tax Planning, Tax Saving, Investment Guidance for Non-Resident Indians

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 (Section 7)
• 5. Wealth Tax Liability of an NRI ?

How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children !

• 1. Income From Joint Accounts Or Joint Investments by NRI : Is it Liable To Be Clubbed For Tax Purposes in case of NRI ?
• 2. When is the income of wife liable to be clubbed with the income of her husband, and vice versa ? in case of NRI
• 3. When is the income of a Minor Child liable to be Clubbed with that of a Parent in case of NRI ?
• 4. When is the Income of Daughter-In-Law Liable to be Clubbed with that of her Father-In-Law or Mother- In-Law in case of NRI ?
• 5. Income of a Major Child cannot be Clubbed with that of his Parent in case of NRI
• 6. When is the Income Of An HUF From Self-Converted Assets Liable To Be Clubbed In The Members’ Hands in case of NRI ?
• 7. When is income from Assets Received on Partial Partition of an HUF liable to be Clubbed with the Income of the HUF in case of NRI ?
• 8. Joint Ownership Of House Property: Does It Make The Income Of A Husband, Wife, And Children Liable To Be Clubbed Together in case of NRI?
• 9. How To Avoid Clubbing Of The Wife’s Wealth With That Of The Husband’s In Case Of NRI
• 10. Gift From Non-Relatives Now Taxed As Income In Case Of NRI

The Incomes of an NRI Completely Exempt from Income Tax !

• 1. Interest On Non-Resident (External) Account Is Fully Exempt From Income Tax
• 2. Interest On NSCS Is Completely Exempt From Income Tax Under Section 10(4B)
• 3. Remuneration Of Non-Citizens Is Exempt From Income Tax
• 4. Income Of Certain Venture Capital Undertakings — Section 10 (23FB)
• 5. Other Exempted Incomes
• 6. Income in Special Economic Zones, 100% EOUs etc.

Capital Gain of an NRI could be Completely Exempt from Income Tax

• 1. Exemption of Long-Term Capital Gains regarding Residential House Property (Section 54)
• 2. Exemption of Long-Term Capital Gains from any Capital Asset On Investment In House Property (Section 54F)
• 3. Exemption of Long-Term Capital Gains On Investment In Bonds of NHAI & REC
• 4. Exemption to facilitate the Conversion Of Partnership Firm into a Company
• 5. Exemption from the Levy Of Capital Gains Tax to facilitate Conversion Of Sole Proprietary Concern Into A Company
• 6. Computation of Capital Gains In Real Estate Transactions
• 7. Other Important Exemptions Regarding Capital Gains Available to NRI
• 8. Cost Inflation Index And Computation Of Capital Gains in case of NRI
• 9. Reduction Of Tax Rate On Long-Term Capital Gains In Regard To Shares And Securities
• 10. Concessional Rate Of Tax On Income From Certain Global Depository Receipts
• 11. Tax Treatment Of Capital Gain On Sale Of Shares, Debentures, Etc. Received Under ESOP
• 12. Provisions Relating To Set-Off Of Long-Term Capital Loss And Carry Forward Thereof Modified— Sections 70 and 74
• 13. Exemption Of Long-Term Capital Gains On Securities And Lower Tax On Short-Term Capital Gains
• 14. Issue of Foreign Currency Exchangeable Bonds Scheme, 2008
• 15. Miscellaneous provisions’ regarding Capital Gains in case of NRI

Items Completely Exempt from Wealth Tax for an NRI

• 1. Only Non-Productive Wealth Is Liable To Wealth Tax From Assessment Year 1993-94.
• 2. Specific Exemptions for NRI under Section 5 of the Wealth Tax Act.
• 3. Clubbing Of The Wealth With The Income Of The Parents
• 4. Assets And Tax Outside India Are Not To Be Calculated While Computing Taxable Wealth Tax

Special Procedure of Assessment regarding Income of an NRI from Foreign Exchange Assets

• 1. Special Provision Of Computation Of The Total Income Of A Non-Resident Indian
• 2. Who Is A Non-Resident Indian For The Purposes Of These Special Provisions?
• 3. Specified Foreign Exchange Assets Income From Which Is Eligible For The Special Provisions Of Assessment
• 4. Income Tax On Investment Income And Long-Term Capital Gains Of An NRI
• 5. When Is No Income Tax Payable On The Long-Term Capital Gains Of Foreign Exchange Assets?
• 6. A Non-Resident Indian Need Not File Any Income Tax Return In Certain Cases
• 7. When Does The Special Procedure Continue To Apply To A Person Even After He Becomes A Resident In India?
• 8. NRIs Have The Option Not To Be Governed By The Special Provisions

Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable

• 1. Tax Benefit Regarding Life Insurance Premium, PPF Contributions, Nscs, Tuition Fees, etc.
• 2. Deduction For Donations To Certain Funds And Charitable Institutions
• 3. Deduction In Respect Of Profits And Gains From A New Industrial Undertaking Or Infrastructural Facility
• 4. Five-Year Tax Holiday To Hospitals At Certain Locations Sec. 80-1B (IIC)
• 5. Tax Holiday To Enterprises Providing Telecommunication Services, Industrial Parks, New Hotels And Having Commercial Production Of Mineral Oil
• 6. Five Year Tax Holiday For New Industrial Undertakings In Industrially Backward Areas & Districts
• 7. Liberalisation Of Tax Holiday Provision For Infrastructure, Telecom Services, Power Generation, Special Economic Zones, Industrial Parks, etc. [ Section 80-IA]
• 8. Ten Year Tax Holiday In Respect Of Certain Undertakings In Himachal Pradesh, Sikkim, Uttaranchal And N.E. States — Section 80-IC
• 9. Five-Year Tax Holiday For Hotels In Districts Having A World Heritage Site — Sec. 801D
• 10. Tax Holiday For Hotel And Convention Centres In NCT Of Delhi And Other Areas — Section 801D
• 11. Deduction’ In Respect Of Medical Insurance Premia — Section 80D
• 12. Additional Deduction For Health Insurance Premium Paid For Parents — Section 80D
• 13. Deduction Of Repayment Of Loan For Higher Studies — Section 80E
• 14. Deduction In Respect Of Certain Undertakings In North Eastern States
• 15. Other Deductions Like Depreciation, Etc. To Nonresident Indians

Procedure for the Filing of Income Tax and Wealth Tax Returns, Assessment, and Refunds in case of NRI

• 1. Income Tax Return To Be Voluntarily Filed And Tax Paid On Self-Assessment If An NRI has Taxable Income In India
• 2. The Assessing Officer Can Also Require The Non-Resident To File Income Tax Return
• 3. NRls Can Apply For Refund Of Income Tax By Filing Income Tax Return
• 4. Income Of NRIs Is Generally Accepted Without Scrutiny
• 5. Regular Assessment After Personal Hearing, And Examination Of Papers, Etc. By The Assessing Officer
• 6. Ex Parte Assessment By The Assessing Officer
• 7. Re-Assessment Or Additional Assessment In Case Of Income Escaping Assessment
• 8. Completion Of Assessment And Payment Of Tax
• 9.Provision Regarding Penal Interest And Penalty For Delay In Filing Income Tax Return Or Payment Of Tax
• 10. Deduction Of Tax At Source And Payment Of Advance Tax By NRIs
• 11. Remedies By Way Of Appeal, Etc. Available To A Non-Resident Indian
• 12. Other Provisions For Rectification And Settlement Of Cases
• 13. Who can be an Agent of a Non-Resident Indian?
• 14. Procedure for getting a Permanent A/c Number (PAN)
• 15. Double Taxation Relief
• 16. Assessment Procedure for Wealth Tax

Gifts by NRIs to Relatives and Friends can be made fully Exempt from Gift Tax

• 1. Gift Tax By NRIs Exempt from Gift Tax
• 2. No Aggregation Of Taxable Gifts
• 3. Gift Of Immovable Property Situated Outside The Taxable Territories Is Completely Exempt From Gift Tax — Regarding Gift Made Till 30 September 1998
• 4. Gifts To Non-Relatives By NRI Is Income

RBI Regulations under FEMA (Foreign Exchange Management Act, 1999)

• 1. Basic Introduction of FEMA and NRIs
• 2. Foreign Exchange Management Act, 1999 (FEMA) and FERA
• 3. NRIs Under Income Tax Act And Persons Resident Outside India Under FEMA
• 4. Foreign Exchange Management Act, 1999 (FEMA) Rules
• 5. RBI Regulations under FEMA (Foreign Exchange Management Act, 1999)

Acquisition and Transfer of Immovable Property in India by NRIs and FEMA

• 1. NRIs Can Hold, Own Or Transfer Immovable Property In India Without Any Condition
• 2. Acquisition And Transfer Of Immovable Property By An NRI
• 3. Acquisition And Transfer Of An Immovable Property By A Person Of Indian Origin
• 4. Acquisition Of Immovable Property For Permitted Activity
• 5. Repatriation of Sale Proceeds
• 6. Latest Amendments Regarding Acquisition Of Immovable Properties

Permissible and Prohibited Current Account Transactions in Case of NRI

• 1. Basic Introductions
• 2. Prohibited Categories Of Current Account Transactions
• 3. Prior Approval Of Government Of India Required For Certain Transactions
• 4. Prior Approval Of Reserve Bank Required For Certain Current Account Transactions
• 5. Liberalisation Of Current Account Transactions

Investment In Shares, Securities, Units And Other Activities, etc. by an NRI in India

• 1. The salient features of Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2000
• 2. Foreign Direct Investment Scheme
• 3. Investment by Foreign Institutional Investors (FIIs) under Portfolio Investment Scheme
• 4. Portfolio Investment Scheme for NRIs on Repatriationlnon-Repatriation Basis
• 5. Purchaselsale of Shares and Convertible Debentures by NRIs on Non-Repatriation Basis
• 6. Purchase and Sale of Other Securities
• 7. Long-Term Capital Gains On Shares : Exemption under Section - 10 (36)
• 8. Other Regulations :  under Foreign Exchange Management (Transfer or issue of Security by a Person Resident Outside India) Regulations

Deposits in India by an NRI ( Non-Resident Indian)

• 1. Introduction- Deposits in India by an NRI
• 2. Non-Resident (External) Account Scheme
• 3. NRE account to RFC account
• 4. Foreign Currency (Non-Resident) Account (Banks) Scheme, i.e. FCNR (B)
• 5. Non-Resident Ordinary Rupee(NRO) Account Scheme
• 6. Non-Resident (Non-Repatriable) Rupee (NRNR) Deposit Scheme
• 7. Non-Resident (Special) Rupee (NRSR) Account Scheme
• 8. Acceptance of deposit by a company in India from NRIs on repatriation basis
• 9. Acceptance Of Deposits By Indian Proprietorship Concernlfirm Or A Company From Nris On Non- Repatriation Basis
• 10. Full convertibility of deposit scheme — Non-Resident Indians
• 11. NRNR, NRSR Accounts To Be Discontinued On Maturity

RFC account of a Returning NRI and Investment Abroad

• 1. Introduction - RFC Account Of A Returning NRI And Investment Abroad
• 2. Opening, Holding And Maintaining A Resident Foreign Currency (RFC) Account
• 3. Tax Haven For Returning Indians Via RFC Account
• 4. Exchange Earner’s Foreign Currency (EEFC) Account
• 5. Direct Investment Outside India By A Returning NRI Or A Resident In India