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Som Datt [ITAT]: Onus is on assessee to prove that distribution from an offshore trust is not taxable in India
Many HNIs create offshore discretionary private trusts with an aim to achieve succession planning goals and escape tax liability in India. However, there is a lack of clarity on taxability of distributions received from these trusts. In this light, there has been an interesting decision given by ITAT Kolkata bench in case of Som Datt…
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How NRIs can manage currency risk in their investment portfolio
In the past few weeks, we’ve seen China devaluing its currency, US Federal Reserve not increasing its rates and a steady depreciation of INR against USD. As a fall out and knee jerk reaction to such events, there has been a sharp increase in NRI remittances to India to benefit from a weaker rupee (news…
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Passive Foreign Investment Company (PFIC) Regulations in US & Tax Implications for Indian expats
Last updated on – Nov 7, 2024 US has a draconian tax provision for Passive Foreign Investment Corporation (PFIC) which makes it unwise for a US person (Citizen/GC/Resident) to invest in any non-US pooled investments. Lot of non-US persons who are unaware of these rules end up moving to US & getting trapped in these…
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Understanding 401K Plans in USA
Today lets discuss about the 401k Plans which are very popular in USA and found in the investment portfolio of most of the returning NRIs coming from USA. In the USA, there are two types of employer-based retirement plans available: defined benefit (where the money that you get on retirement is defined) or defined contribution…
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How NRIs can invest in Indian equity markets
India’s growth story is compelling especially when seen in comparison to other emerging economies and developed markets. So, if you’re a returning NRI and wish to be part of the growth story, one of the ways to invest in Indian economy is to invest in equity shares. Though I am hugely in favour of investing…
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Capital and Current Account Transaction as per FEMA
Lot of times, there is confusion whether a particular transaction is allowed as per FEMA regulations or not. And it is here that that it is important to first establish whether the account is a capital account transaction or a current account transaction under FEMA. In FEMA, each transaction has to be classified as either…
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How to calculate Residential Status for Tax Purposes in India
A person’s residential status as per the tax law of a particular jurisdiction has a huge impact on the taxability of income of a person in that jurisdiction. Many a times, I see past tax returns of my NRI clients where incorrect residential status is mentioned and a result, they get a tax notice as…
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How NRIs can create Emergency Fund
An emergency first is the first layer of defence in anyone’s financial portfolio against sudden financial requirements like medical emergencies, job loss, sudden payments etc. Though I had some years back written a post on emergency fund Link, when it comes to NRI, the situation is slightly different. As an investment adviser, in course of…
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Aadhaar and PAN requirements for NRI/OCI/Seafarers/Expats
As you may be aware, Finance Act, 2017 has imposed a new requirement regarding furnishing Aadhaar number in income tax return for FY 2017-18. This requirement was not there in the Finance Bill 2017 and given that filing tax returns is just some months away, there has been a great deal of confusion amongst everyone …
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Tax Residency Rules for Companies under Income Tax Act: An Overview
As regards individuals, the residential status under the Income Tax Act is fairly simple and it is based on the number of days stay in India – I’ve discussed it in detail in this post, along with a calculator: However, in case of companies, the rules are different and depend on the place of effective…