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Taxation of Private Trusts in India: An Overview
Private trust is an instrument used mainly by HNI families or families having special needs children, for effective succession planning. There are many benefits of forming a private trust, over a will. However private trust creation and ongoing trust management necessitates a cost, which makes it viable only if a high corpus is available. In…
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FEMA Rules on NRI Investment in Indian Company/LLP
It is well known that an NRI can invest in India via a portfolio investment scheme (PIS) route i.e. by purchasing and selling shares on a stock exchange through a Depository Participant. As regards PIS investment, I have already written a detailed post on it, you can refer it here: How returning NRIs can invest…
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Effect of Indian Rupee (INR) depreciation on Resident & Non-Resident Indians (NRI)
In the below table I have given a brief summary of how INR depriciation impacts the various categories of investors (Resident/NRI/Students etc.) Category Effect of rupee depreciation & Remedial Steps NRI/PIOs Effect: Rupee depreciation has been positive for those remitting to India for investments or for household expenses of dependants etc. Remedial Steps:…
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NRI Tax Implication w.r.t. Immovable Property Transaction in India
NRIs have always invested heavily in properties in India. Even in the current times of low domestic demand, whatever demand is left is primarily coming from NRIs based abroad. However, many NRIs I have interacted as part of my professional work have been completely clueless about tax implications in India, on their property transactions. Some…
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NRIs: Think twice before buying property in your parent’s name
A very common dilemma that NRIs face while buying property in India – whether to buy on own name or on parents’ name. Today, I will write on this issue – reasons why NRIs prefer registering properties on parents’ name, possible legal and succession related implications and finally my view. Common reasons NRI buy property…
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Non Resident Ordinary (NRO) Account: All you wanted to know
Till a person is a resident of India, he can have the regular resident savings accounts and fixed deposits. However, as per the Foreign Exchange Management Act (FEMA), a person who becomes resident out of India (or in simple terms, an NRI) cannot have these basic resident accounts. He has to “re-designate” these accounts as…
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Tax and FEMA issues faced by PIO/OCI living and working in India
If you are an OCI and are living and working in India, you can face confusion at each step of the way in your financial dealings in India. In this post, I am trying to address some of the questions of such OCIs in a form of a FAQ. Please note that for the purpose…
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How Ireland-based NRIs can transfer their Pension on return to India
Last month, I was working on a case of an Ireland based Person of Indian Origin (PIO) who had returned back to India. He had worked in Ireland for good many years and accumulated a good amount of pension. This pension is termed as occupational pension in Ireland. It took him some time to settle…
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Concept of Permanent Establishment (PE) under DTAA – An Overview
When we speak of business income of a foreign enterprise in India, there is this concept of “business connection” under Section 9 of the Income Tax Act. In simple words, concept of “business connection” means that any income through a business connection is taxable in India. This is a very inclusive and wide definition whereby…
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Raman Chopra Case – Salary earned in USA is exempt if person qualifies as USA resident under India-USA DTAA
Lot of NRIs based out of USA return back to India after some years. As a result of this, in the year of return, they might have worked in USA for some months & at the same time, lived in India for more than 182 days in the year. Since the person has lived >182…