ET Now has an interesting article that highlights money management tips for NRIs. The practical tips include
- Maintain An NRO/NRE Account In A Bank In India – If you are an NRI and still have income sources in India such as income from ancestral property or from a rented out property, you can keep the money in India by opening an NRO bank account.
- Create A Power Of Attorney To Manage Your Property In India – If you are leaving behind your property in India, you must assign a person to take care of your assets on your behalf. I
- If You Wish To Keep Money in An Indian Bank – If you want to maintain a fund with an Indian bank, while you are abroad, you must look for a bank which has a branch in the country you reside at.
- Watch Out For Currency Rate Fluctuations – You should be careful about the currency fluctuations when making an investment or taking loan in India. A slight change in the value of Indian Rupee against the foreign currency can significantly impact your effective return.
- Weigh Your Options Before Taking Loan – Being an NRI, you have the advantage of taking loan from both Indian and International banks in the country you live in.
- Manage Your Taxes – As an NRI, you need to comply with the tax laws of both countries: where you reside and in India. The tax deduction benefits in India are more or less similar for both NRIs and the residents. Still, you might want to consult a tax advisor to maintain tax discipline.
- Stay Updated With What’s Happening in the Indian Economy – If you own properties or have money invested in India, then it is important that you stay updated with the policy and regulatory changes taking place in the country.
- Buy Health Insurance Cover – NRIs often prefer to get treatment done in India to deal with a health issue, as there is family back home to take care of them. So a health policy in India always comes handy. You can claim tax benefits on the premiums paid under Section 80D and reduce the tax liability for income accrued from India.
- If You Plan To Move Back To India – One of the important decisions to make once you are abroad is whether you want to continue living abroad or move back to India.
A recent article in BBC.com features Pakistani designer Nashra Balagamwala and her views on arranged marriage.
When Pakistani designer Nashra Balagamwala produced a board game about arranged marriage, most news reports about her wrongly assumed she was dead against it. Actually her position is far more nuanced. And one goal is to explain to people in the UK and elsewhere how it works.
Balagamwala’s kickstarter campaign generated a lot of buzz and raised thousands of dollars more than what she was seeking.
Balagamwala was at the Rhode Island School of Design in the US when she came up with the idea.
“I was about to head home to Pakistan at the end of the year, and I had some proposals waiting for me, so I started stalking the Facebook accounts of those guys to find something about them that my parents wouldn’t approve of, so I could get out of meeting them. And then I thought to myself, ‘Why not get rid of the problem once and for all?’ So I created a list of every ridiculous thing I’ve done to get out of an arranged marriage and turned it into this light-hearted board game.”
She tested her game out on her friends, a mixture of South Asians and white Americans.
An American male friend was in fits of laughter while playing. He admitted to Balagamwala that he’d been worried the game would trivialise the subject, but said that he now had a better understanding of it.
Link to an article in scroll.in
An article in Business line highlights how “With RERA kicking in, NRI interest in Indian realty set to rise”
Implementation of Real Estate (Regulation and Development) Act, 2016 will boost the Non-Resident Indian sentiments on Indian real estate sector, say market experts.
With more transparency coming in the realty sector, there is bound to be an increase in the number of NRIs planning to buy property back home, they said..
The Indian real estate sector, in recent times, has witnessed a lot of changes, more so after the introduction of the Real Estate (Regulation and Development) Act, 2016 and the Goods and Services Tax (GST).
“As RERA will ensure timely delivery of projects and also since all the information will be available online, it will boost the confidence of NRIs who are thinking of investing in the Indian real estate market. But, the GST might have a negative impact on the buyers as there might be increase in the price of the properties,” said Parveen Jain, Vice-Chairman, NAREDCO (National Real Estate Development Council).
Right now, prospective home-buyers have to pay a 12 per cent GST to developers if they are planning to buy a property which is under construction. However, there is no GST on the fully constructed property.
Also check out our recent articles on investing in India:
The US census is finally counting how many people speak Tamil, Punjabi, Telugu, and Bengali.
Marketers, analysts and consultants continually watch for demographics trends on the Non-Resident Indian community in the US and North America. These trends serve many purposes and also enable focused marketing to an ethnic community.
Wouldn’t Amazon want to know if you are of Tamil origin and begin marketing Pongal related items a month before January? Likewise marketing in advance of Holi and Lohri if you happen to be a Punjabi. Details of ethnic subgroup, especially of those from a South Asian background are valuable to marketers. e-Commerce giants like Amazon, Google, Apple aspire to know detailed demographics of their target consumers and use sophisticated algorithms, cookies and tracking to build databases.
Desi Associations across the US and small businesses and Indian markets also actively court members of ethnic communities. In regions with a larger population of a particular community, one can see multiple associations focused on sub-groups. Likewise one might see multiple Indian restaurants catering to Punjabi, Andhra, Canara, Chettinad and other specialized cuisines in a region with higher population of such communities.
The recent move by US census bureau to track “Language Spoken at Home and English-Speaking Ability” of ethnic communities is an interesting development being watched by marketers. A recent announcement indicates that New data for five languages are available on American Fact Finder Table B16001: Haitian, Punjabi, Bengali, Telugu and Tamil.
- Of the 280,867 people ages 5 and older who spoke Punjabi at home, 48.0 percent lived in California.
- Of the 259,204 people ages 5 and older who spoke Bengali at home, 38.6 percent lived in New York.
- The 321,695 people ages 5 and older who spoke Telugu at home and the 238,699 people speaking Tamil at home were more evenly distributed across many parts of the nation. For both languages, the highest concentration of speakers lived in California, followed by Texas and New Jersey (the number of persons who spoke Tamil in Texas and New Jersey are not statistically different).
In the past years, GaramChai.com has been publishing summary of ethnic data from different sources “Indians, Indo-American and NRIs in the US – Fatcts and Figures” and summary of inputs from a review of Census data.
The US census is finally counting how many people speak Tamil, Punjabi, Telugu, and Bengali
Indian and foreign students aspiring to study in the US do so with a clear goal – to eventually land a job in Corporate America. Graduates who complete an advanced degree need to seek out an employer that will sponsor their H1B work visa. However, recent trends indicate that such sponsorship are harder to come by.
President Trump has promised tightening of H1-B work visas, a topic we have reviewed a few times in recent times.
Now comes news that an increasing number of Indians are flocking to Canadian Business Schools in Canada and not the US.
Canada, which has been courting international students aggressively for about a decade now, seems to be gaining from Trump administration’s protectionist rhetoric in the US. Canada has been able to attract 20-30% more MBA students from India this year in Business Schools alone.
At the University of Toronto’s Rotman School of Management, 56 of the 350 MBA students in the class of 2019 are Indian. At Concordia University’s John Molson School of Business in Montreal, applications from India rose by about 30% in fall 2017 while 51% of the applications to the full-time MBA offered at the Alberta School of Business in Edmonton came from India. The University of Calgary’s Haskayne School of Business told Economic Times that 60-70% of its international MBA students are Indian.
Wonder if this is a one-off or a long term trend?
Last week we saw an announcement regarding “PPF accounts to be closed, interest lowered to 4 per cent if you become an NRI”. This has obvious implications for NRIs who were planning to continue holding their Indian investments in PPF and other funds.
An article in TOI this week focuses on “How NRIs can get past their tax worries”
- TDS can be a pain – Tax deduction at source (TDS) is a major pain point for NRIs. Resident investors in stocks and mutual funds are not subjected to TDS, but NRIs are. Short-term capital gains from stocks are subject to 15% TDS, while those from debt funds and debentures, gold and property are slapped a higher rate of 30%. Even longterm gains from property and gold are subject to 20% TDS. The TDS on the interest on bank deposits is only 10% for resident Indians, but NRIs have to cough up 30%.
- How to avoid TDS – One way NRIs can avoid the high TDS is by being the second holder in joint investments. For all investments, the tax liability is always that of the first holder’s. If the first holder is a resident Indian, the gain will not be subjected to any TDS. Similarly, if the NRI is the second holder in a property, the TDS will not apply unless the rent is above Rs 50,000 a month.
- Claim tax benefits – Though NRIs are beaten by the TDS stick, they also get some carrots. The interest earned on NRE account is tax free and continues to be exempt for two years after the individual returns to India. It’s best to retain deposits held in foreign currency in the NRE account to earn tax-free interest for two more years. After two years, when the tax status changes, these deposits can be moved to the regular savings account.
Economic Times also reviews “How NRIs can avoid tax troubles”
A livemint article – While filing tax in India, NRIs do not have to state overseas income – examines a few Frequently asked questions:
- I am moving to Cambodia for a long-term assignment. I am told that India does not have a Double Taxation Avoidance Agreement (DTAA) with that country. Please let me know how that will impact my tax outgo. I have interest income in India and will continue to file tax return on that. Will I have to include my income in Cambodia in the India tax return as well, and pay tax on it again in India?
- I am an NRI and I had purchased some land in a rural area of Thiruvananthapuram, Kerala, in October 2014. I am now planning to sell it to buy a new plot in an urban part of the city. We had bought this property for Rs15 lakh and will be selling it for Rs35 lakh. Please tell me my tax liability on this, considering that I am an NRI.
- I am an NRI, and I want to buy a car in India, without taking any loan. I will be using funds from my non-resident external (NRE) account. Can you explain the tax implication if the car is in my name or somebody else?
You may also be interested in GaramChai.com section on Finance
Non Resident Indians are continually looking for investment opportunities in India. A few weeks ago, we blogged about “NRIs for real estate investment in India – Know the simple Rules” The Government of Indian recently announced new rules under which select small savings schemes like Public Provident Fund (PPF) and National Saving Certificates (NSC) will not earn you the same rate if you become non-resident Indians (NRI).
A summary of changes to rules and what it means to NRIs:
- NRIs will no longer be permitted invest in small savings schemes like NSC and PPF. In the past they were allowed to retain their PPF account if they had opened it before becoming an NRI.
- PPF and NSC currently fetch an interest rate higher than bank savings rates. Some of it is subsidized by the Government of India. (Current rate of PPF is 7.8 per cent while Post Office savings account get 4 %)
- PPF accounts would be deemed to be closed prior to maturity in case the holder becomes a non-resident Indian (NRI). The investor will be then paid interest at the rate applicable to Post Office savings accounts till the date the PPF account is closed.
The Indian government notification on PPF dated October 3 states,
“Provided that if a resident who opened an account under this scheme, subsequently becomes a non-resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident and interest with effect from that date shall be paid at the rate applicable to the Post Office Saving Account up to the last day of the month preceding the month in which the account is actually closed.”
The finance ministry notification adds:
“Provided that if a resident Indian having purchased a certificate, subsequently becomes Non-Resident during the currency of the maturity period, the certificate shall be encashed or deemed to be encashed on the day he becomes a non-Resident, and interest shall be paid at the rate applicable to the Post Office Savings Account, from time to time, from such day and up to the last day of the month preceding the month in which it is actually encashed.”
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