NRI funds invested coming back to NRO account

Tax queries 153 views 3 replies

Hi,

A NRI has invested in a company(real estate part ownership) and made the payment from a NRI account. If he is selling it within a year at cost price and the proceeds come to his NRO account, does it affect his Income Tax in any way?  

Thanks,

Suman

 

Replies (3)

For repatriation of the funds he will require CA certificate, for which he need to file ITR.... (though tax liability would be nil)

ITR filing is must. NRI will be filing ITR under Non-resident status.

Capital Gain computation is at par with Resident Indian.

Only thing Buyer of property is required to deduct TDS I think, @ 30% on the sale agreement value . This is a trouble spot for NRI assessee ( in claiming a refund)

Furthermore if there is any changes in recokner value of SR by more than 5% of the agreement value, the NRI assessee will have deemed STCG and subsequent tax payments too.

In the above scenerio , the buyer also will have to declare excess amount (recokner value minus agreement value) as income under section 56(2) being Income from other sources.
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For bank accounts NRI / NRO - NRI assessee has to comply with RBI guidelines
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An NRI  can transfer his funds from NRE TO NRO , However it is not advised to Transfer due to the below mentioned reasons that are :-

  1. As Interest on NRO account is taxable so if transferring to NRO from NRE lead to Taxability of Funds whereas Interest on NRE account is free from TAX.

  2. Repatriation Restriction is levied on NRO account .so if transferring funds to the NRO account then repatriation freedom will be lost.

  3. So as per the stated question, Firstly NRI invest the money in a company from his NRE account ,Thereafter proceed of sale if come to his NRO account then it will be taxable and Interest accruing on that is also taxable.


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