1. How many NRI are there in the world?
While India is a growing economy, there are several other countries across the world where Indians are getting equally good career opportunities. The NRI population overseas is increasing due to the rise in global options every day.
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2. How can I get NRI status?
-Convert your existing savings bank account into an NRO account.
-Open an NRE account.
-Buy Insurence before you leave India.
-Assign a Power of Attorney (POA)
-Open a Portfolio Investment Scheme (PIS/PINS) account
-Update KYC details with Financial institutions
-Open a PPF account
-Convert your Fixed deposits to NRO deposits
-Activate online payment for Home loan deposits
-Activate online payment for Home loan EMIs
-Initiate international roaming on your Mobile number
-Get your Debit/Card converted into the international card
3. What are the various facilities available to NRIs/OCBs?
NRIs/OCBs are granted the following facilities :
-Maintenance of bank accounts in India.
-Investments in securities/shares of, and deposits with, Indian firms/companies.
-Investments in immovable properties in India.
4. Are NRIs permitted to maintain accounts in rupees and in foreign currency?
Yes. Accounts can be maintained by NRIs in rupees as well as in foreign currency. Accounts in foreign currencies can, however, be maintained with authories dealers only.
5. Do NRI need a visa to visit India?
Yes, US citizens of Indian origin are required to hold a valid visa. As India do not allow dual citizenship, all Indian citizens are required to renounce Indian citizenship when they acquire citizenship of a foreign country and their Indian passport will be canceled. There is a special visa called Overseas Citizen of India (OCI) which is available to people of Indian origin who are citizens of a foreign country.
6. Do NRI have to declare foreign assets?
Resident Individual recently moved abroad NRI or not, every individual must file a tax return if their income exceeds Rs 2,50,000. But note that NRIs are only taxed for income earned/collected in India. So, an NRI will pay taxes on income earned while in India, and income accrued from FDs and savings account.
7. Is it true that NRIs have to pay tax in the US on the increase in the value of mutual fund units? For example, if I had invested ₹10,000 through SIP route in a mutual fund and now its value is ₹11,000, do I have to pay tax on that gain (₹1,000) even though I might not have sold off the units and intend to hold them for longer? I have also invested in NPS. Do I have to pay tax on the gains in the value of assets even though I haven’t encashed them yet?
According to the US tax laws, a tax is payable on notional or undistributed gains from holding of foreign mutual funds i.e other than mutual funds of the US. Such foreign mutual funds, for the purpose of US tax laws, fall under the category of Passive Foreign Investment Company (PFIC). Therefore, as an NRI, you must report notional gains in the market value of your holdings of India mutual funds during the year, even if they have not been redeemed. You must report these details in Form 8621. However, this is subject to the PFIC guidance and regulations prevalent in the US. So you must also verify locally. Stocks held through foreign pension funds (NPS) are exempted from the PFIC reporting requirement. Hence, the gains on the value of the asset would not be taxed on notional basis in the US.
8. Are the deadlines to file tax returns the same for resident Indians and NRIs?
Yes, the broad guidelines remain the same. However, the minimum exemption limit for NRIs is ₹2.5 lakh, irrespective of their age. NRIs do not get the higher exemption limit of ₹3 lakh for those between 60 and 80 years of age and ₹5 lakh for those more than 80 years old. NRIs must file their tax returns by the due date, which is the same as applicable to resident individuals.
9. Do an NRI aged 65 years have to file a return even if his gross total income is Rs 2.8 lakhs during a year from India?
11. Can NRI invest in mutual funds?
Certainly, NRIs can invest in mutual funds in India – as long as they adhere to the Foreign Exchange Management Act (FEMA). A mutual fund in your home country can give you a diversified portfolio with the desired mix of debt and equity securities. Even if you are risk-averse and want a fixed income investment avenue, the Indian debt market comes with higher interest rates. You may start with equity funds, debt funds or hybrid funds.
12. Which country has most NRI?
13. Do NRI have dual citizenship?
As per the Indian law, even NRIs (as against those who have overseas citizenship) are not allowed to buy agricultural land. Therefore, there is no question of a dual citizenship to be allowed just on account of the OCI card.
14. Should taxes be deducted when payments are being made to NRIs?
NRI or not, every individual must file a tax return if their income exceeds Rs 2,50,000. But note that NRIs are only taxed for income earned/collected in India. So, Rahul will pay taxes on income earned while in India, and income accrued from FDs and savings account.
15. How can an NRI e-file my tax returns?
As an NRI, if you earn income in India and it exceeds Rs.2,50,000, you are liable to file tax returns. You can file your returns online. The process is as follows –
Register on the Income Tax India Website
Choose the correct ITR form.
You can e-file your returns or download the relevant ITR complete and upload it.
Verify the ITR-V. It can be verified by printing it out, signing it and sending it via normal post or speed post to CPC Bangalore within 120 days of submitting the form. The address is –
Income Tax Department – CPC
Post-Box No – 1
Electronic City Post Office,
Bangalore – 560100, Karnataka
You will get an acknowledgment on receipt of the form.
It can also be verified using a digital signature.
16. How can I make an Aadhaar card?
A circular issued on November 15 by Dr. Ajay Bhushan Pandey, CEO of the UIDAI, has directed federal ministries and departments to issue directives to state governments and other relevant agencies that NRIs are not eligible to apply for an Aadhaar card.
17. Should I disclose my foreign bank accounts while filing taxes?
It is not mandatory for NRIs to disclose the details of their bank accounts in the country of residence when they file tax returns. You can mention the details of the bank account in India so that the refund if any can be transferred there. If you do not have a bank account in India you can give the details of the foreign bank account so that refund can be remitted to you.
18. When do I not need to file an Income Tax Return?
As an NRI, if you have invested in certain assets and TDS has been deducted and you do not have any other income except the income earned in these investments, you need not file tax returns. The assets applicable to this rule are –
- Shares in a public or private Indian company
- Debentures issued by a publicly-listed Indian company
- Deposits with banks and public companies
- Investment options of the central government
19. Can NRI transfer the proceeds of the sale of property received to the country I currently reside in?
If you purchased the house when you were a resident Indian, then the sale proceeds need to be credited to the Non-Resident Ordinary (NRO) Account.
If the property was purchased out of income earned in India or using a home loan taken in India and sold when you are an NRI, the amount must be credited in the NRO account.
If the house is purchased by using funds earned abroad, then the repatriation can be only till the extent of the funds used for purchase. The excess sale consideration over the amount paid in foreign exchange can be remitted out of NRO account subject to USD 1 million per financial year per person. This is limited to the sale of two such properties.
20. As an NRI, what are some of the investments that I can make in India?
You can invest in equity shares and mutual funds. But you cannot short sell or be involved in intraday trading. You can invest in fixed deposits in FCNR deposits and NRE accounts. You can also invest in real estate, gold etc. Investments in bonds issued by the Government of India, public companies and private companies are also permitted. If you think you will retire in India, you can invest in the National Pension Scheme (NPS) too.
21. I will be sent abroad for an assignment/project for a short-term. How will my income be taxed?
Going abroad on assignments and projects are exciting. You get to work with people from a different culture and you get the opportunity of visiting a new country. Usually, people get a tidy sum which can be added to the savings. If the assignment is for a duration of 3 months to one year, you will get your salary in India and an allowance.
If you stay in India for 60 days or more, the salary and the allowance is taxable unless the allowance is paid for expenses incurred above and there are valid receipts for the same.
If you go abroad on a long-term assignment which means the duration is one year to three years, then you are on the payroll of the company unit abroad. During this assignment, if you stay in India for less than or equal to 182 days, you will not pay tax on income received abroad. If you stay in India for more than 182 days, you will be liable to pay tax on the income received abroad.
If you pay taxes abroad, you will have to check if you can avail tax concession or exemption under DTAA.