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All about selling a property in India by an NRI and then repatriating the funds

We get numerous enquiries from our NRI guests who want to vend an irremovable property in India but they do n’t know how to go about it. They want to know the duty counteraccusations of dealing an irremovable property by an NRI in India, TDS applicable when an NRI vend a property, How to reduce TDS on trade of property and farther capital gain duty and also eventually how to repudiate the trade proceeds out of India. Also, resident buyer also aren't apprehensive of the procedure which needs to be followed while buying a property from an NRI.

When an NRI vend a property located in India, it's the buyer’s responsibility to abate the withholding duty/ TDS (Tax subtracted at Source) from the trade consideration while making a payment to him. Presently this TDS rate is further than 20 edu cess cargo. This is applicable when an NRI dealer hold this property for further than 2 times and 30 if property is vended within 2 times of purchase.

This chance is applicable on trade consideration rather than capital gain. This makes TDS rate applicable onanon-resident dealer is relatively high in comparison to applicable on resident merchandisers. This TDS subtracted shall be deposit by the buyer to the income duty department within the specified time limit and the same TDS challan shall be encouraged to the dealer for his records. Also TDS return shall be filed by a buyer before the due date and TDS instrument shall also be encouraged to the dealer. Once it’s done the NRI dealer can check the same TDS details in his 26AS also.

Once the TDS is subtracted, an NRI can file his duty return on the base of his capital gain duty liability and can claim refund of redundant TDS subtracted. This can be done after the end of fiscal time in which property is vended. The NRI can reduce his capital gain duty by investing his capital gain quantum in any other domestic property or by investing in government notified bonds within the specified time limit and as per the applicable vittles.

Refund that can be claimed = TDS subtracted by buyer – Capital gain Duty Capital gain duty = Capital gain *20.8 ( add cargo, if applicable) .Capital gain = Trade proceeds – Listed * Purchase price and cost of Enhancement-– Transfer expenditure * Listed means inflating the value of property by applying government notified cost affectation rate.

Alternate option is, Rather of getting TDS subtracted at a advanced rate, an NRI dealer can apply for lower/ O TDS deduction instrument to his assessing officer/ income duty officer depending on his capital gain duty. Also the buyer shall abate TDS at the same rate mentioned in the instrument.

In case, an NRI wants to repudiate the trade proceeds or refund quantum entered from income duty department also his bank will ask him to submit 15ca and 15cb instrument along with other documents.15 cb instrument is a instrument from Chartered Accountant (CA) while Form 15ca is the information given by the remitter.

Important point

1. Please make sure to file a duty return in India if you have vended a property in India. This becomes ineluctable especially when you're planning to repudiate the trade proceeds. Else there are huge chances that you'll get a notice from Income duty department asking reason of non – form or about the source of plutocrat which is remitted outside India.

2. If you're buying a property from an NRI dealer also you shall have TAN no. If you do n’t have also you can apply for it online. 3. Filing Lower/ NIL TDS instrument is an online process now. Time to get a instrument depends on the time taken by assessing officer to respond. Normal time to get a Lower/ NIL TDS instrument is one to two months after applying for it.

Disclaimer Being an NRI, you may not be in touch of Indian rules and regulations. You may be getting different views and it might sound confusing to you. In this composition, I tried to explain the process in nonprofessional language just to give you a rough idea of the process. Please note, data and numbers of each case are different and we advise you to take professional advice to know duty counteraccusations in your case while dealing a property in India. This composition is just to make you understand veritably basics of the process in a simple way.

Please do let me know if you still have any questions related to over. You can write to me at ushma@nricaservices.com or call/ whatsapp me at 919910075924.

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To help taxpayers, the government included Section 197, which provides that if the entire tax liability of the person whose TDS is being deducted at the end of the year is less than the amount of TDS being deducted, he may file an application with the Income Tax Officer for obtaining Lower/NIL TDS Deduction Certificate. Know more at NRI CA Services now!

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Residential status and Tax incidence in India for F.Y 2020-21

Hi Friends,

This year we got many emails with questions on residential status and their taxability in India. this is often thanks to the very fact that due to current pandemic situation, many of us who went on the off shore projects weren't ready to come thanks to suspension of flights while many NRIs who were working abroad got an choice to work from home and hence they came back to India to remain with their family.

All this shuffle resulted in change in their residential status for Indian taxation purposes. Also, there was an Amendment in Finance Act, 2020 which also brought few changes in provisions of residential status which added to the confusion.

Let me attempt to explain residential status in order that you'll determine your tax incidence correctly.

I have divided this text in 3 parts:

1. Residential status – Resident Indian which may further be divided between Resident and Ordinarily Resident (ROR) and Resident but Not Ordinarily Resident (RNOR). If you're not a resident as per the definition of resident Indian then you'll be considered as Nonresident (NR). First determine what's your residential status.

2. Tax incidence supported Residential status- Once residential status is decided then you'll check whether your only Indian income is taxable or your foreign income is additionally taxable in India. For ROR, their global income is taxable while for NR only their Indian income is taxable. For RNOR, their Indian income and only that foreign income is taxable which is out of business controlled from India/Profession found out in India is taxable.

3. FAQs – Few questions with answers which are commonly asked to us during this fiscal year

Please note, i'm talking about only individuals during this article. It means we aren't discussing residential status of company, partnership firm etc.

Residential Status

Resident –

As per the Income-tax Act 1961, a private is claimed to be Resident of India, if he satisfies either of the subsequent conditions:

(i) Stay in India is a minimum of 182 days during the previous year; or

(ii) Stay in India is a minimum of 60 days during the previous year and a minimum of three hundred and sixty five days during 4 preceding the previous year.

>The relaxation is provided:

An Indian citizen or an individual of Indian Origin (PIO) who, leaves India for employment or person being outside India and comes on a visit to India during the previous year, he will qualify as a resident of India as long as he stays in India for 182 days or more rather than 60 days as mentioned in point(ii) above.

Nonresident-

If an individual satisfies none of the above basic conditions, he are going to be considered as Non resident .

If an individual is resident then he shall check whether he's Resident and Ordinarily Resident (ROR) or Resident but not ordinarily resident (RNOR).

Resident and Ordinarily Resident(ROR) –

An individual is claimed to be ROR, if he satisfies the subsequent two conditions:

(i) Resident in India in a minimum of 2 out of 10 previous years immediately preceding the relevant previous year; and

(ii) Stay in India is 730 days or more during 7 years immediately preceding the relevant previous year.

Resident but Not Ordinarily Resident (RNOR)

If indivdual is resident but doesn’t satisfy both additional conditions quoted above then he are going to be RNOR.

Two additions/exceptions to the above rule are inserted through an Amendment in Finance Act, 2020:

If a private satisfies any of the below two set of conditions, he will still be considered as RNOR:

1. If he satisfies following all four conditions:

(i) he's an Indian citizen or person of Indian Origin

(ii) His total income, aside from the income from foreign sources, exceeds Rs 15 lakhs during the previous year.

(iii) he's not susceptible to tax in the other country or territory by reason of his domicile or residence or the other criteria of comparable nature.

2. If he satisfies following all four conditions:

(i) he's an Indian citizen or person of Indian Origin

(ii) His total income, aside from the income from foreign sources, exceeds Rs 15 lakhs during the previous year.

(iii) He involves Indian on a visit during previous year

(iv) His stay in India is 120 days or more but but 182 days.

Tax incidence based on Residential status

Type of IncomeRORRNORNR

Indian IncomeTaxable in IndiaTaxable in IndiaTaxable in India

Foreign incomeTaxable in IndiaOnly two types of Foreign income is taxable in India:

Business income from the business controlled wholly or partly from India

Professional income from the profession set up in India

Not taxable in India

Please make a note: Amendment through Finance Act,2020 regarding deemed residency and RNOR will affect only those individuals who have two sorts of foreign income i.e Business income from business controlled from India and Professional income from profession found out in India.

FAQ

Q.1. i'm an Indian citizen and employed out of India. thanks to pandemic, I got an choice to work from home so I came back to India.

Ans: (i) My stay in India are going to be quite 182 days during F.Y 2020-21. i'm getting salary in my foreign checking account and that i am paying taxes in Foreign country. Am I susceptible to pay tax in India?

Ans: Yes, you'll be considered as a resident Indian for F.Y 2020-21. Then you've got to see further whether you're ROR or RNOR supported number of days stayed in India for preceding years.

(ii) My stay in India are going to be quite 182 days during F.Y 2020-21. I left India in F.Y 2017-18 for the aim of employment, before that i used to be resident Indian only. i'm getting salary in my foreign checking account and that i am paying taxes in Foreign country. Am I susceptible to pay tax in India?

Ans: you'll be considered as a ROR and your Global income will taxable in India. you'll claim foreign decrease or relief of taxes paid outside India supported tax treaties in both countries.

(iii) My stay in India are going to be quite 182 days during F.Y 2020-21. Before that I came to India for 3 weeks per annum since F.Y 2010-11. i'm getting salary in my foreign checking account and that i am paying taxes in Foreign country. Am I susceptible to pay tax in India?

Ans: you'll be considered as a RNOR. Your Indian income which foreign income are going to be taxable which is out of business controlled from India or profession found out in India.

(iv) My stay in India are going to be quite 182 days during F.Y 2020-21. My status is ROR in India. i'm getting salary in my foreign checking account but i'm not paying any tax in foreign company as there's no tax therein country?

Ans: Then you've got to pay tax in India

(v) My stay in India is quite 60 days but but 120 days in relevant FY and stay in India in preceding 4 years is quite three hundred and sixty five days . I even have no intention to travel back.

Ans: you'll be considered as a resident Indian for F.Y 2020-21. Then you've got to see further whether you're ROR or RNOR supported number of days stayed in India in preceding years.

(vi) My stay in India is quite 60 days but but 120 days and stay in India in preceding 4 years is quite three hundred and sixty five days . i'm on a visit to India and can return soon.

Ans: you'll be considered as nonresident. Only income earned and received in India are going to be taxable.

(vii) My stay in India is quite 120 days but but 182 days and stay in India in preceding 4 years is quite three hundred and sixty five days . I even have come to India on a visit and my Indian income is quite INR 15 lakh.

Ans: you'll be considered as a RNOR. Your Indian income which foreign income which is out of business found out in India or profession found out in India are going to be taxable in India.

(viii) My stay in India is quite 120 days but but 182 days and stay in India in preceding 4 years is quite three hundred and sixty five days . I even have come to India on a visit and my Indian income is a smaller amount than INR 15 lakh.

Ans: you'll be considered as a Nonresident Indian. Only income earned or received in India are going to be taxable.

Q.2 i'm a far off citizen. My stay in India is quite 60 days but but 120 days and stay in India in preceding 4 years is quite three hundred and sixty five days . i'm on a visit to India and can return soon.

Ans: you'll be considered as a resident Indian for F.Y 2020-21. Then you've got to see further whether you're ROR or RNOR supported number of days stayed in India for preceding years.

Q.3 i'm a citizen of India living in UAE. i'm a lawyer and have knowledgeable firm found out in India. I get consultancy fees in UAE also . I even have not visited India in F.Y 2020-21. I even have Income in India which is quite INR 15 Lakh.

Ans: you'll be considered as a RNOR and your all Indian income and income out of this consultancy service in UAE are going to be taxable in India.

Q.4 i'm a citizen of India living in USA. i'm a lawyer and have knowledgeable firm found out in India. i buy consultancy fees in USA. During my visit to India, I stayed in India for quite 120 days in F.Y 2020-21. I even have Income in India out of my savings and investments in India which is quite INR 15 Lakh.

Ans: you'll be considered as a RNOR and your all Indian income and income out of this consultancy service in USA are going to be taxable in India.

Disclaimer: Being an NRI, you'll not be in-tuned of Indian rules and regulations. you'll be getting different views and it'd sound confusing to you. during this article, i attempted to elucidate the method in layman language just to offer you a rough idea of the method . Please note, facts and figures of every case are different and that we advise you to require professional advice to understand tax implications in your case. this text is simply to form you understand very basics of the method during a simple way.

Please do let me know if you continue to have any questions associated with above. you'll write to me at ushma@nricaservices.com or call/whatsapp me at +91 9910075924.

Click Here For More Information!

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You do not have to submit a federal tax return if your total income for the year does not reach specified criteria. The amount of income you can make before you have to file a tax return is determined by your age, filing status, and the sort of income you have. Connect with NRI CA services for filing tax returns today!

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If you are an NRI, income obtained and acquired outside India and money paid back is not taxable. But if your income in India surpasses Rs.2,50,000, complete the process of filing corporate tax in India. You can ask for assistance from NRI CA Services anytime, anywhere. We are here to assist you!

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If you are an NRI, income obtained and acquired outside India and money paid back is not taxable. But if your income in India surpasses Rs.2,50,000, complete the process of filing corporate tax in India. You can ask for assistance from NRI CA Services anytime, anywhere. We are here to assist you!

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Tax filing in India by Non-Resident Individual (NRIs) can be a complicated process if you are not informed of the right process. In such a case, you can take assistance from expert CAs available at NRI CA Services. Our experts will help you in tax filing in India as an NRI.

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NRIs are permitted to transfer funds from NRO bank account to NRE account up to USD 1 million per financial year. There are some documents you would need for transferring money from NRO to NRE. Get in touch with NRI CA Services and know everything in detail.

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A tax agreement between two or more nations to withdraw taxing the same income twice is regarded as Double Taxation Avoidance Agreement (DTAA). If you want the same, then do let us know our expert CAs at NRI CA Services. We are 24*7 available to serve you!

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The Registrar of Companies (ROC) comes under the Ministry of Corporate Affairs, and it is the leading authority assigned to deal with the administration of the Companies Act 2013. If you need assistance concerning ROC compliance, connect with us at NRI CA Services. Our team of expert CAs will guide you properly!

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Are you finding an organization or company that can help you with fast and reliable NRI services? If so, then NRI CA Services has got your back. We are a team of experts who are well-aware and qualified of every aspect involved. Hit a visit to us online today!

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The only method to get your tax refund is to file a tax return. For filing tax returns, you can directly get in touch with us at NRI CA Services. We will assist you with the process online without involving you in any hassle. Visit our official website today!

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NRI CA Services is a professional consultancy that will help you understand the GST registration process for NRI. You do not have to trouble yourself anymore. Just tell us what you want us to do and we will complete that for you in a short period without any much involvement from your end.

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You can now file MCA forms in India without any hassle with the consistent support from our experts. We are offering this service at cost-efficient charges for all. You do not have to be worried about anything at all. Hit our official website and get the work done professionally!

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Doing business in India is not a piece of cake if you do not have the support of the experts who take care of all the legal formalities and paperwork. If you are interested in opening your own company, then reach us immediately. We will help you with everything you need.

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Have you been looking for NRI Consultancy Services in India? If yes, then connect with us right away. We are 24*7 available for our clients who need our assistance in completing their duties being an NRI. You can tell us your requirements and we will complete them for you with professionalism!