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Returning NRI'S

What we Offer?
  • Advise on your Bank Accounts
  • Advise on Tax implications in India and foreign country.
  • Filing of your Returns in India
  • Advise on FEMA compliances
  • Guide you on Double Taxation Avoidance Agreement between different countries.

GENERAL AREAS OF CONCERN FOR A RETURNING INDIAN

A Returning Indian needs to plan his return to India and has to be guided by The Income Tax Act, 1961 and Foreign Exchange Management Act, 1999

  1. Planning the date and month of return to India so as ensure minimum tax liability in the year of return (April to March in India)
  2. Holding and operating of non-resident Banking accounts on your return to India and Taxability thereof.
    Account description Treatment to be given
    NRO a/c Re-designate to Resident a/c
    FCNR a/c

    Hold up to maturity

    Upon maturity it should be converted into Rupee a/c or RFC a/c

    NRE a/c Re-designate to Resident a/c or Transfer balance to RFC a/c

    Upon maturity it should be converted into Rupee a/c or RFC a/c

    NRE a/c Re-designate to Resident a/c or Transfer balance to RFC a/c


    RESIDENT FOREIGN CURRENCY ACCOUNT (RFC Account)

    • Returning NRIs are free to open and maintain such accounts with authorized dealers, on becoming residents.
    • The funds held in RFC are fully repatriable and also denominated in Forex.
    • Funds in RFC accounts can be remitted abroad for any bona fide purpose of the account holder or his dependents.
  3. Returning NRI is required to inform all Banks, Companies, Funds, etc. as to change of residential status from NRI to Resident.
  4. Taxability of Income earned, in and outside India
  5. In the year of return to India: The tax liability of a person returning India would depend on the Residential Status of a person as per the Income-tax Act, 1961. Under the Indian Tax Laws overseas income is liable to Tax in India only if the assesse is an ordinarily resident.

    In the subsequent period: A returning Indian who has been a Non Resident for 9 years or more, then for 2 successive years he shall be a resident but not ordinarily resident (RNOR).

  6. Application of Double Taxation Avoidance Treaty, if any applicable
  7. Advice / information on various aspects of Tax Laws / FEMA, 1999 in respect of holding of assets in and outside India / earning income in and outside India and its taxability
    • All kind of Foreign exchange / Overseas assets such as properties, bank deposits, stocks and securities, life insurance policies, loans, company deposits, debentures, bonds etc. acquired, held or owned by an NRI while he was abroad can be continued to be so held and dealt in any manner even after the NRI’s return to India for permanent settlement.
    • Sec.6(5) of FEMA permits an ROI to hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such security, or property was acquired or owned by such person when he was a resident or inherited from a resident
    • Interest paid by scheduled banks to Non Resident or to a person who is not ordinarily resident on RBI approved foreign currency deposits (i.e. RFC deposits) is exempt (Sec.10 (15) (iv) (fa)). The exemption, in respect of RFC account, continues till such time as the account holder continues to be “Resident but Not Ordinarily Resident”.
    • NRIs have been offered a separate concessional tax regime in respect of certain types of income under Chapter XIIA comprising section 115C to 115I. The benefit of concessional tax treatment under chapter XIIA continues even after NRI becomes a resident.