NRI Repatriation Services and Form 15 CA
NRI Repatriation Services
NRI Repatriation refers to the process of transferring Indian Rupees from NRO accounts to overseas accounts or FCNR deposits. It is crucial for NRIs looking to move funds abroad, ensuring compliance with regulations.
Yes, there is a limit of US$ 1 Million per financial year per account holder. This aggregate limit covers various repatriation categories but excludes income.
Capital funds from asset sales, excluding immovable property, are subject to the US$ 1 Million limit. Income earned in India, like Salary, Interest, Dividend, Rent, is not covered. Sale proceeds from residential property are restricted to two houses, exceeding two falls under the US$ 10 Million limit.
NRIs can apply to the RBI for remittances beyond the limit on grounds like Medical, Education, or genuine reasons, subject to discretionary approval. Outward remittances from NRE accounts have no limit.
Essential documents include:
- Application for Repatriation of Funds
- Form A2 FEMA Declaration Form
- Original Form 15 CB (Certified by CA-India)
- Original Form 15 CA
- Signed copy of PAN card image
- Copy of filed ITRs in India
Important points to note:
- Check for income tax implications in India.
- Cumulative repatriation of current income is permissible.
- Ensure NRO account credits are legitimate.
- Adhere to the two-property limit for repatriating sale proceeds from residential properties.
- Seek RBI approval for remittances beyond the current limit for specific grounds.
TAX EXEMPTION CERTIFICATE (TEC)
Tax Deducted at Source (TDS) is a mechanism mandated by Section 195 of the Income-tax Act, 1961, where any person making payments to a non-resident must deduct tax at applicable rates. For NRIs, every rupee earned in India is subject to TDS at income tax slab rates.
NRIs engaged in property transactions face substantial TDS rates, reaching up to 20% plus Cess & Surcharge on Long-term Capital assets and 30% Cess & Surcharge on Short-term Capital assets. This can lead to significant funds being locked in TDS, especially when there is a loss on property sale or low tax liability.
Certainly. In a scenario with a sale consideration of 1.00 Crore, purchase value of 1.10 Crore, and a capital gain(loss) of (0.10) Crore, the resulting TDS at 30% tax plus Surcharge and Cess amounts to 0.3588 Crore, even though the actual income tax payable is nil.
TEC is a solution allowing NRIs to apply to the Assessing Officer (AO) for a lower or nil TDS on their income using Form 13. If the AO is convinced that the payee’s total income justifies lower deduction or no deduction of income tax, they will issue a lower/nil TDS certificate.
NRIeCA’s expert team, consisting of Chartered Accountants and Tax Professionals, specializes in obtaining TECs for NRIs across India. Our services include accurate tax computation of capital gains, tax planning, and comprehensive compliance support. We also provide online guidance and clarifications for any queries.
The TEC application requires documents such as Income Tax Login details, Registration on TRACES, Sale Agreement, TDS Account Number & TAN Letter, Passport copy, Circle Value evidence, property documents, Buyer PAN and Aadhar Copy, Bank statements, Income Tax Return Copy, Tax Record (26AS), and Estimated income computation.
The time frame depends on document clarity and the AO’s discretion but typically takes around 45 days. It is advised to compile documents carefully and address any queries promptly to expedite the process.
The payer is required to deduct tax at the time of payment. Therefore, obtaining TEC before the payment is crucial. It is recommended to file the application promptly after the sale deed is executed.
Conclusion: Navigating the intricacies of TDS as an NRI involved in property transactions requires understanding, planning, and expert guidance. NRIeCA is here to provide tailored solutions, ensuring optimal tax outcomes for NRIs in India.
Capital Gain
Capital Gain is the profit realized from selling assets, and for NRIs in India, it’s subject to taxation.
Capital Assets encompass tangible and intangible properties held for long-term investment. This includes land, buildings, machinery, patents, trademarks, and more. The guide provides a detailed list of inclusions and exclusions.
Certainly. The guide distinguishes between Short-Term Capital Assets (held for less than 36 months) and Long-Term Capital Assets (held for more than 36 months). Specific assets may have shorter criteria.
LTCG, taxed at 20% plus Health and Education Cess and Surcharge, is explained in detail. Even the sale of gifted or ancestral property attracts LTCG tax for NRIs.
The guide outlines the criteria for qualifying assets such as property, stocks, bonds, and agricultural land, helping NRIs understand LTCG eligibility.
STCG is explained, covering gains from assets held for less than 36 months. Specific assets may have a 12-24 months holding criterion.
Absolutely. The guide outlines three effective strategies, including investing in CGAS, setting off capital losses, and investing in bonds to optimize tax positions.
Section 54EC provides an exemption for long-term capital gains when reinvested in Rural Electrification Corporation or NHAI bonds. NRIs must reinvest within six months, ensuring that capital gains do not exceed the amount invested, and hold the assets for a minimum of 36 months.
Yes, NRIs should be mindful that the reinvestment amount for Section 54EE should not exceed Rs. 50 lakh in the current and following fiscal years. Selling new securities before three years may reduce the exemption amount, and loans against new securities are taxable.
The guide breaks down CGAS, offering a solution for NRIs unable to invest immediately in a new property, providing relief to taxpayers.
The guide provides a clear understanding of varying tax rates for different assets and durations, crucial for NRIs navigating the Indian tax landscape.
NRIeCA, with its team of Chartered Accountants and Tax Professionals, stands ready to provide personalized assistance and expert guidance for NRIs seeking optimal tax outcomes in India.
The CII is a crucial factor that adjusts the acquisition and improvement costs for inflation, ensuring accurate and fair calculations over different financial years. It plays a pivotal role in determining the indexed cost of acquisition, a key element in capital gains tax computation.
NRIs can avail a one-time lifetime exemption if their capital gains do not exceed Rs. 2 crores. They must invest the capital gains (not the entire sale proceeds) in a new property within specific time frames and adhere to conditions such as completion of construction within three years. Only one house property can be purchased or built, and the exemption is revoked if the new property is sold within three years.
Yes, NRIs can benefit from exemptions under Section 54B for the transfer of agricultural land. They need to invest in new agricultural land within two years of the transfer, and the newly acquired land must not be sold within three years. Alternatively, if unable to buy land, depositing gains in a specified bank account before the due date is a viable option.
These exemptions apply specifically to long-term capital gains for NRIs. Reinvesting in specified securities within six months is key. However, selling the new securities before three years may reduce the exemption amount, and loans against these securities are treated as capital gains.
Post the amendment under budget 2019, NRIs can now avail tax exemption by investing in long-term capital gains from the sale of up to two house properties. Earlier, the provision was limited to up to one house property, with the condition that the profit gains should not exceed Rs. 2 crores.
Yes, NRIs can claim exemptions under Section 54F by investing the entire sale consideration in a new residential property. This investment can be made one year before or two years after the sale, and the gains can also be used for construction, which must be completed within three years. However, only one house property can be purchased or built, and the exemption is revoked if the new property is sold within three years.
TDS On Sale Of Property
TDS, or Tax Deducted at Source, is a mechanism where the buyer deducts tax from the payment made to the seller. In the case of NRIs selling property in India, TDS ensures compliance with Indian tax laws, with the responsibility falling on the buyer.
For Resident Indian sellers, the TDS rate is 1%, whereas NRIs face higher TDS rates on the entire consideration amount. The seller’s residential status is a crucial factor in determining TDS liabilities.
Unlike transactions with Resident Indian sellers, there is no threshold limit for TDS on property sales by NRIs. TDS must be deducted under Section 195, irrespective of the property’s value.
Yes, NRIs facing higher TDS rates can seek relief through a Tax Exemption Certificate (TEC). Filing Form 13, along with supporting documents, allows sellers to justify and secure nil or lower TDS deduction.
TDS rates on long-term capital gains vary based on the property’s sale value, ranging from 20.80% to 23.92%. Short-term capital gains are subject to additional surcharge and cess, as per income tax slabs.
Buyers must diligently deduct and deposit TDS within seven days of the month-end. Timely submission of TDS returns (Form 27 Q) and furnishing TDS certificates (Form 16 A) to sellers are crucial steps for compliance
Yes, NRIs should proactively communicate their residential status to buyers. It is advisable to mention this in the Sale Agreement to avoid potential disputes in the future.
A TEC allows NRIs to claim exemptions or lower TDS rates. NRIs can file an application in Form 13, supported by relevant documents, to obtain a TEC and provide it to the buyer for reduced TDS deductions.
Yes, failure to comply with TDS payment obligations may lead to significant penalties for buyers. Therefore, buyers must adhere to the prescribed timelines and regulations.
TDS on Property Purchase
TDS, or Tax Deducted at Source, is a mechanism where the buyer deducts tax at prescribed rates during property transactions. For NRIs, understanding TDS is crucial to ensure compliance with Indian tax laws.
Failure to comply with TDS regulations may result in penalties and interest on delayed payments, placing a financial burden on the purchaser.
TDS rates depend on whether the seller is a Resident Indian or an NRI. It is essential to verify the seller’s status during the transaction to accurately determine the applicable TDS rate.
TDS is applicable if the sale consideration exceeds INR 50 Lakhs when purchasing property from a Resident Indian seller.
Steps include checking PAN and Adhar linkage, deducting TDS at every payment, depositing TDS within 30 days, and providing Form 16B to the seller.
No, TAN is not required for TDS compliance when purchasing property from Resident Indians.
Yes, TDS rates for property purchases from NRIs vary based on the period of holding the property. It is advised to seek expert opinion before deducting tax.
TAN is required when purchasing property from NRIs or Foreign Citizens, and it must be obtained if not available.
Yes, TDS can be deposited online using Challan No. ITNS 281 or through various bank branches.
NRIs should adhere to TDS deposit timelines, file Form 27Q for every quarter, and obtain Form 16A after filing TDS returns for seamless compliance.
NRI Income Tax in India
Your residential status is determined based on the number of days you spend in India during a financial year. If you are in India for 182 days or more in the previous year, or 60 days or more in the previous year and 365 days or more in the preceding four years, you are considered a resident.
The Finance Act, 2020 has amended the exception for Indian citizens and persons of Indian origin, changing the 60-day threshold to 120 days if their total income (excluding foreign sources) exceeds ₹15 lakh during the previous year.
NRIs are taxed on income earned in India, such as salary, property income, capital gains, and interest on deposits. Foreign income is generally exempt from taxation in India.
Filing income tax returns is mandatory for NRIs if their total annual income exceeds the basic exemption limit of ₹2.5 lakh. The due date for filing returns is 31st July of the relevant assessment year.
NRIs can check Form 26AS or AIS on the Income Tax portal to track identified transactions against their PAN, helping them stay aware of high-value and specified financial transactions.
NRIs can avail exemptions under Sections 80C, 80D, 80E, 80G, and 80TTA. However, certain exemptions like those under Section 80CCG, 80TTB, and 87A are not applicable to NRIs.
Yes, NRIs can opt for the new tax regime. However, they need to carefully evaluate the forfeiture of deductions and exemptions under this regime. Consider factors such as the basic exemption limit, tax slabs, and surcharge rates.
Belated returns can be filed by 31st December or before assessment completion. Penalties of ₹5,000 are applicable, reduced to ₹1,000 if the total income does not exceed ₹5 lakh.
NRIs can switch between the regimes, but there are limitations. Once opted for the old regime after switching, they cannot opt for the new regime again in future years.
NRIeCA offers expert services to NRIs, providing comprehensive assistance with residency status determination, tax planning, filing returns, and navigating the complexities of Indian income tax laws. Our dedicated team is ready to address specific needs and ensure seamless compliance.
PAN
PAN is crucial for NRIs as it is mandatory for various financial transactions, TDS challan payments, online registration on the Income Tax portal, and obtaining lower tax deductions. It ensures smooth compliance with tax regulations.
PAN is mandatory for transactions such as property purchases exceeding 50 lakhs, TDS payments, and various other financial dealings. Without PAN, NRIs may face difficulties and potential penalties.
No, online registration on the Income Tax portal, which allows access to Form 26AS and High-Value Transactions, is only possible with a PAN. It is essential for filing income tax returns and ensuring compliance.
Without a valid PAN, TDS deductions are often subjected to higher rates, leading to larger sums being held up in transactions. Credit and refund processes become challenging without the inclusion of PAN.
Yes, NRIs cannot file applications for lower tax deductions without a valid PAN. Having PAN ensures that NRIs can avail themselves of potential tax benefits in various financial transactions.
Yes, NRIs can apply for PAN online through services like NRIeCA. The required documents include identity and address proofs, such as passports, voter ID cards, or utility bills
In property transactions exceeding 50 lakhs, TDS deductions are required, and without PAN, NRIs may face higher deduction rates, hindering the smooth completion of transactions.
Yes, NRIs can apply for a PAN at any time. It is advisable to obtain a PAN retroactively to avoid challenges in financial transactions and to comply with tax regulations.
NRIeCA provides hassle-free services for PAN application in India, including document preparation, examination of supporting documents, submission, and ensuring successful PAN allotment and delivery for NRIs.
While PAN is a legal requirement, it also offers practical benefits by ensuring smooth compliance, facilitating online processes, and allowing NRIs to efficiently manage their tax-related affairs in India.
Foreign Tax Credit
Foreign Tax Credit (FTC) is a mechanism allowing residents and returning NRIs to claim a credit for foreign taxes paid. This is crucial to avoid double taxation on income earned abroad.
Returning NRIs often face income taxation in foreign countries, leading to foreign tax payments. FTC helps offset the tax burden when they offer the corresponding income for taxation in India.
Yes, residents engaged in global consultancy, technical services, or holding foreign investments may face double taxation. FTC serves as a tool to prevent dual tax liability on such income.
To claim FTC, taxpayers must file Form No. 67 on the Income Tax portal in online mode within the specified time. This involves providing supporting documents and verification through a digital signature or an acceptable mode.
NRIeCA’s expert team provides services such as advice and filing of Form No. 67. They ensure accurate and legitimate claims of FTC based on available documents and guide in compiling necessary paperwork for the claim.
Before declaring foreign income and claiming FTC, individuals should consider prerequisites such as currency conversion, aligning tax periods, understanding the non-refundability of foreign tax in India, and awareness of double tax relief.
Yes, Form No. 67 can be revised within the stipulated time, providing flexibility for updates or corrections. It can be filed anytime during the relevant assessment year, as per the latest amendments.
Yes, FTC is available even in countries without a DTAA. Relief is calculated as the average income tax in India, subject to taxes paid abroad.
FTC reduces the tax liability by allowing NRIs to credit the foreign taxes paid against their Indian tax obligations, ensuring a fair and balanced taxation approach.
Timely and comprehensive record-keeping of foreign income and taxes paid abroad is crucial for FTC claims. These records may need to be submitted to Tax Authorities during examinations.
DTAA
Section 90 deals with provisions related to the avoidance of double taxation for countries with DTAA, while Section 91 pertains to taxpayers in countries without a DTAA with India.
Salaries, capital gains, income from house property, and income from savings or fixed deposits are among the types of income covered by DTAA.
No, DTAA agreements are dynamic, and provisions vary for each country.
Yes, DTAA includes the sharing of vital taxpayer information among partner countries to prevent double taxation and tax evasion.
As an NRI tax expert, NRIeCA offers comprehensive services to assist NRIs in understanding and benefiting from DTAA provisions, ensuring smooth compliance with international taxation regulations.
Comprehensive Guide to Startups in India
Absolutely! India welcomes NRIs to venture into the startup realm. Ensure compliance with the Startup India Initiative criteria, and you’re good to go.
NRIs, like any other entrepreneur, can leverage the tax exemptions, ease of business, and access to venture capital funds offered by the government to boost their startups.
Yes, NRIs can apply for recognition, provided their startups meet the eligibility criteria outlined in G.S.R. notification 127 (E).
NRIs selling a residential property and investing in eligible startups can enjoy long-term capital gains tax exemption under Section 54GB, subject to specific conditions.
NRIs can self-certify compliance for labor and environmental laws through an online procedure, easing regulatory burdens for the initial five years.
Yes, NRIs can tap into the INR 10,000 Crore fund set up by the government to secure venture capital for their startups.
Thorough documentation, adherence to recognition criteria, and compliance with tax regulations are essential for NRIs to navigate the startup landscape seamlessly.
Yes, NRIs can carry forward losses if the shareholders maintain voting power and possess shares on March 31 of the relevant year, and the loss occurred within seven years of the company’s incorporation.
NRIs must submit standard recognition documents along with proof of their NRI status, ensuring a smooth application process.
To enjoy Angel Tax Exemption, NRIs should ensure their startup is registered under DPIIT, comply with the necessary conditions, and follow the approval process outlined by the Central Board of Direct Taxes.
Setup Business In India
India’s stable economic growth across various sectors reduces market volatility, making it an appealing choice for NRIs seeking better returns on investments compared to other countries.
NRIs and foreign citizens are regulated by various laws, including Income Tax, Companies Act, GST, FEMA, and RBI regulations. Compliance with these laws is crucial for the smooth operation of businesses in India.
While sole proprietorships, partnerships, and one-person companies are not allowed, NRIs can register private limited companies, public limited companies, or Limited Liability Partnerships (LLPs) for business setup.
Important considerations include ownership structure, management of the business, physical presence in India, and compliance with FDI guidelines and regulations.
Yes, NRIs and foreign nationals can act as directors in Indian companies under the Companies Act 2013. They need to obtain a Directors Identification Number (DIN) and comply with the minimum director requirements set by the Companies Act.
Yes, having a physical address and presence in India is a mandatory requirement for incorporating a company. Proof of the registered office address, including a No Objection Certificate for leased office space, must be provided.
Essential documents include TIN, PAN card, passport, valid visa, NRI status certificate, and address proofs for both India and the foreign country. Documents must be attested by the Consulate of the Foreign Embassy in India if submitted by foreign nationals.
The process involves obtaining digital signatures, applying for Director Identification Numbers, seeking name approval, and filing incorporation documents with e MOA and e AOA through Form SPICe+.
While some sectors require specific approvals, most sectors allow FDI under the automatic route within monetary caps. LLPs require prior approval from the Reserve Bank of India for FDI.
NRIeCA offers expert services for business setup in India and ensures timely compliance with relevant laws, facilitating a smooth and hassle-free process for NRIs venturing into the Indian business landscape.
Elevating Corporate Finance
Absolutely! NRIs can actively engage in corporate finance activities, contributing to funding decisions, capital structuring, and overall financial planning for businesses in India.
Corporate finance provides NRIs with opportunities to strategically invest, participate in capital financing decisions, and contribute to the financial success of businesses.
NRIs can source capital through commercial banks, financial intermediaries, or by issuing debt securities. Alternatively, selling stocks to equity investors is a viable option for substantial capital needs.
Striking a balance between debt and equity is crucial to mitigate risks. Too much debt can increase default risk, while relying heavily on equity may dilute earnings and value for early investors.
Managing current assets, liabilities, working capital, and operating cash flows is essential for short-term liquidity. NRIs can explore additional credit lines or commercial paper issuance as liquidity backup.
Essential steps include preparing comprehensive project reports and Credit Monitoring Arrangement (CMA) data, ensuring compliance, compiling supporting documents, negotiating with banks, and submitting a thorough application.
Due diligence ensures compliance with regulations and standards, reducing risks and enhancing the success of corporate finance initiatives for NRIs.
Yes, NRIs can secure loans by providing property collateral. Comprehensive search and property valuation are necessary steps in this process.
Corporate finance activities, from capital investment to tax considerations, are geared towards maximizing shareholder value through strategic financial planning and implementation.
NRIeCA offers a range of services, including financial planning, project report preparation, CMA data sheet creation, liaison with banks, regular financial monitoring, and restructuring existing finances, tailored to meet the unique needs of NRIs in the corporate finance landscape.
Company incorporation
Absolutely! NRIs can actively engage in corporate finance activities, contributing to funding decisions, capital structuring, and overall financial planning for businesses in India.
Corporate finance provides NRIs with opportunities to strategically invest, participate in capital financing decisions, and contribute to the financial success of businesses.
NRIs can source capital through commercial banks, financial intermediaries, or by issuing debt securities. Alternatively, selling stocks to equity investors is a viable option for substantial capital needs.
Striking a balance between debt and equity is crucial to mitigate risks. Too much debt can increase default risk, while relying heavily on equity may dilute earnings and value for early investors.
Managing current assets, liabilities, working capital, and operating cash flows is essential for short-term liquidity. NRIs can explore additional credit lines or commercial paper issuance as liquidity backup.
Essential steps include preparing comprehensive project reports and Credit Monitoring Arrangement (CMA) data, ensuring compliance, compiling supporting documents, negotiating with banks, and submitting a thorough application.
Due diligence ensures compliance with regulations and standards, reducing risks and enhancing the success of corporate finance initiatives for NRIs.
Yes, NRIs can secure loans by providing property collateral. Comprehensive search and property valuation are necessary steps in this process.
Corporate finance activities, from capital investment to tax considerations, are geared towards maximizing shareholder value through strategic financial planning and implementation.
NRIeCA offers a range of services, including financial planning, project report preparation, CMA data sheet creation, liaison with banks, regular financial monitoring, and restructuring existing finances, tailored to meet the unique needs of NRIs in the corporate finance landscape.