NRI finance roundup for November 2017

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.

Photo: iStock

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 

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NRI investments in housing set to almost double to $11.5 billion this year from 2013 level: Report

“It is believed that the new change in government has infused new sense of confidence about the prospects of Indian economy,” said Kanika Gupta Shori, COO and co-founder, Square Yards.


Also check out?NRI Q&A: Is investing in land in India by NRIs a good and logical decision?


The Narendra Modi-led government has given a significant boost to the confidence of the non-resident Indians (NRIs), with their investment into the primary residential real estate market expected to almost double this year.

About $11.5 billion of investment by NRIs is expected to come in the new home or primary residential market across top 8 major cities in 2017, against $6 billion in 2013, according to a report by real estate transaction platform Square Yards.

“It is believed that the new change in government has infused new sense of confidence about the prospects of Indian economy,” said Kanika Gupta Shori, COO and co-founder, Square Yards.

Over 20% of NRI investment in Indian real estate comes from the United Arab Emirates (UAE), followed by other major NRI populated countries such as the USA and the Kingdom of Saudi Arabia. Other countries such as Canada, the UK, Singapore & Australia also source of substantial NRI capital inflow in Indian realty.

“A depreciating Rupee against the dollar and other currencies have added further impetus to the rise of momentum of NRI investment into the Indian real estate,” she said.

Read rest of the article on Economic Times Reality