NRI OPERATION OF HIS INR FUND IN INDIA

Tax queries 595 views 12 replies

A.K.Agrawal

Investments & Finance

132 Points Joined November 2008

In case an I.Tax payer Indian, with his only interest income by loans to few parties in India in INR, goes overseas in following sequence -

1. for studies & does part time job,

2. becomes NRI,

3. after completion of studies got marriage with a foreign citizen, & does full time job,

4. got foreign citizenship ---

Then, is he allowed to operate his bank A/Cs, investments & I.T. returns in same old fashion as usual thru his PA holder father ?

If NO, then what are the changes, he has to perform thru his father, during above various stages ?

Replies (12)

A.K.Agrawal

Investments & Finance

132 Points Joined November 2008

ANYBODY ? PL. REPLY

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

/forum/nre-to-nro-126883.asp

A.K.Agrawal

Investments & Finance

132 Points Joined November 2008

Thanks for the NRI link mentioned by you.

But can you pl. guide specifically for this case, particularly wherein no FOREX is involved ?

It is merely an old INR fund, which have been accumulating since last many year by year as only interest income.

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

he is liable to file return if

1) the gross interest income including all exceeds threshold exemption limit ( 1.6 lacs now)

2) TDS is deducted

A.K.Agrawal

Investments & Finance

132 Points Joined November 2008

The NRI assessee interest income has been deducted as TDS & he is filing return since many years & also operating his bank A/Cs as a resident Indian -- --resulting no loss to Revenue Dept. Is it ok.?

If not, what changes to be made in his bank A/Cs operations, investments, filing IT returns, TDS ETC. ?

Whether Sec. 115-I allows to continue all above operations as usual, without declaring himself as a NRI ?

If not, what are the consequences -- i.e. penalty etc. ?

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

thats not a issue with incometax, but the deposits and investments management may make u troublesome at the time of redemption, as the declaration there would be "resident" would not be true as per the current status, and they can deny to pay back in such situation.

it is always in favor of person to keep the records updated to the extent possible.

A.K.Agrawal

Investments & Finance

132 Points Joined November 2008

Thanxs & gratitude for your consistent reply.

Chapter XII-A of I.TAX elaborates rules for merely FOREX fund coming to India, by a NRI.

No operational rule is given about old INR fund of a NRI, rotating through his old bank A/Cs into simple old investments particularly in PPF, NSC, LIC & some private parties. So--

1. Will maximum TDS rate be applied for such interest income? What other implications are ? e.g. I.T. Return etc.

2. What changes to be taken according to FEMA in such cases, where no FOREX is involved ?

Only some time, few INR from his own Indian bank A/C, converted to FOREX were remiited abroad to NRI for his family maintenance & survival there.

Other CACLUB members are also invited to solve my problems.

A.K.Agrawal

Investments & Finance

132 Points Joined November 2008

ANYBODY PL. SOLVE MY QUERIES

A.K.Agrawal

Investments & Finance

132 Points Joined November 2008

Is my querry not consistent ? PL. SOMEBDOY RESPOND

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

Liberalised Remittance Scheme for Resident Individuals- Enhancement of limit from USD 100,000 to USD 200,000

Circular No RBI/2007-08/146 A. P. (DIR Series) Circular No.9 dated September 26, 2007

1. Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to A. P. (DIR Series) Circular No. 51 dated May 8, 2007 on the Liberalised Remittance Scheme for Resident Individuals (the Scheme).

2. With a view to further liberalize the Scheme it has been decided, in consultation with the Government of India, to enhance the existing limit of USD 100,000 per financial year to USD 200,000 per financial year (April - March) with immediate effect. Accordingly, AD Category-I banks may now allow remittance up to USD 200,000, per financial year, under the Scheme, for any permitted current or capital account transaction or a combination of both.

3. All other terms and conditions mentioned in A. P. (DIR Series) Circular No. 64 dated February 4, 2004, A. P. (DIR Series) Circular No. 24 dated December 20, 2006 and A. P. (DIR Series) Circular No. 51 dated May 8, 2007 shall remain unchanged.

4. Necessary amendments to Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 (Notification No. FEMA 1/2000- RB dated 3rd May 2000) are being notified separately.

5. AD - Category I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this Circular have been issued under Section 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law.

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

Originally posted by : A.K.Agrawal

Thanxs & gratitude for your consistent reply.

Chapter XII-A of I.TAX elaborates rules for merely FOREX fund coming to India, by a NRI.

No operational rule is given about old INR fund of a NRI, rotating through his old bank A/Cs into simple old investments particularly in PPF, NSC, LIC & some private parties. So--

1. Will maximum TDS rate be applied for such interest income? What other implications are ? e.g. I.T. Return etc.

- for PAN holders in india the rules are no different than resident, incometax return is option to claim back the TDS.

2. What changes to be taken according to FEMA in such cases, where no FOREX is involved ?

- the reply is made in last post,

Only some time, few INR from his own Indian bank A/C, converted to FOREX were remiited abroad to NRI for his family maintenance & survival there.

Other CACLUB members are also invited to solve my problems.