NRI SERVICES
Frequently Asked Questions
NRI Investment in India Consultancy
India’s substantial industrial growth over the past two decades has made it an increasingly attractive destination for foreign direct investments (FDI). As a result, NRIs are now considering India a viable option for earning profits by investing in its diverse market. With opportunities spanning real estate, equities, mutual funds, fixed deposits, and debt funds, the Indian market presents a promising avenue for wealth creation.
Many NRIs residing abroad often face concerns about managing their capital, banking services, and investments in their home country. Our consultancy assists in selecting financial products aligned with your portfolio and goals by providing timely advice and recommending the most suitable investment options.
We offer the following services:
- Advisory on tax implications of various investment options such as equity-linked savings schemes (ELSS), unit-linked insurance plans (ULIPs), tax-free bonds, real estate investment trusts (REITs), mutual funds, National Pension System (NPS), fixed deposits (FDs), and Public Provident Fund (PPF).
- Guidance on disclosure requirements for FATCA, FINCEN, CRS, and WDF compliance.
- Assistance in recovering unclaimed shares and fixed deposit receipts (FDRs).
NRI Compliances & Disclosures
We provide various financial, legal, and advisory services to Non-Resident Indians (NRIs), individuals of Indian origin residing abroad. These services require adherence to specific disclosures and compliance protocols to ensure transparency, safeguard client interests, and meet regulatory obligations.
FATCA/CRS
The Foreign Account Tax Compliance Act (FATCA) was introduced by the US government in 2009 to prevent US taxpayers from avoiding taxation by holding wealth abroad. This act mandates financial institutions to report details of accounts held by US taxpayers. The Indian government implemented FATCA in 2015 through an inter-governmental agreement with the USA.
NRIs residing in the US and investing in Indian assets must comply with FATCA regulations. These rules require financial institutions to disclose account details of US taxpayers, and NRIs must provide a self-declaration of FATCA compliance when making investments in India. The Indian government mandates all NRI investors from the US to self-declare FATCA compliance using Form 61B, as per Rules 114F and 114H of the Income Tax Rules, 1962. Alternate procedures are also available.
We offer comprehensive assistance in fulfilling all FATCA and CRS disclosure requirements.
Worldwide Disclosure Facility (WDF)
The Worldwide Disclosure Facility (WDF) is used to disclose UK tax liabilities related to offshore income or gains. While WDF does not offer preferential terms, early disclosure can help avoid significant penalties. This facility applies to individuals who need to report offshore income or gains for all tax years, including up to and including 2023/24.
We provide guidance and support to ensure compliance with WDF requirements.
Lower Rates of TDS
Lower/NIL TDS for NRI Selling Property in India
For NRIs, OCIs, and Foreign Residents selling property in India, TDS provisions are governed by Section 195 of the Income Tax Act.
- TDS is 20% of the sale consideration if the property qualifies as a long-term capital asset.
- TDS is 30% of the sale consideration if the property qualifies as a short-term capital asset.
In most cases, the actual tax liability of the seller is lower than the TDS amount specified. To prevent the unnecessary blocking of funds with the tax department, the Income Tax Act allows obtaining a Lower Deduction or NIL TDS Certificate under Section 197. This certificate can be secured by filing Form No. 13 online with the jurisdictional tax officer, accompanied by the necessary documentation.
Services Offered
- Preparation and filing of applications for lower TDS certificates.
- Advisory services for reduced TDS rates.
- Assistance for NRIs as buyers of property.
- Additional related services.
This ensures reduced financial burden and avoids delays in receiving refunds.
15CA-15CB Forms for Remittances
We provide assistance in filing Form 15CA and Form 15CB, which are related to the process of remitting funds to non-residents or foreign entities.
Form 15CA: This is a declaration of remittance that must be submitted by the remitter (the person making the payment to a non-resident) to the authorized dealer bank (the bank through which the remittance is made) before making the payment. It includes details such as the remitter’s and beneficiary’s name and address, the purpose of the remittance, the amount being remitted, and any tax deducted at source (TDS).
Form 15CB: This is a certificate issued by a Chartered Accountant, which the remitter must obtain before making a payment to a non-resident. The form certifies that the payment is not taxable in India or that the appropriate tax has been deducted. It also confirms that the remittance complies with the Income Tax Act, 1961, and the Double Taxation Avoidance Agreement (DTAA) between India and the country of the non-resident.
Additionally, Form A2 is used for transferring money abroad and must be submitted to the authorized dealer (a bank or financial institution authorized by the Reserve Bank of India) for outward remittances.
For all foreign remittances, filing Form 15CA-15CB with the Income Tax Department is mandatory.
Our Services Include:
- Preparation of Form 15CA-15CB for remittances from India.
- Consultancy on the filing and requirements for Form 15CA-15CB.
- Assistance with remittances between NRO and NRE accounts.
- Guidance on remittances from NRO accounts to overseas accounts.
- Support in complying with Foreign Exchange Management Act (FEMA) regulations related to foreign remittances, including repatriation of up to USD 1 million per calendar year for NRIs, subject to applicable income tax payment
NRI Taxation Services
NRIs are individuals who are either citizens of India or Persons of Indian Origin (PIO) but do not reside in India. Many NRIs maintain residences, properties, investments, and businesses in India, making it essential to understand the tax implications under Indian tax laws.
Our team of experienced NRI tax consultants specializes in providing personalized tax planning solutions to help NRIs manage their tax liabilities while ensuring compliance with Indian tax regulations. We offer expert guidance on navigating the complexities of tax structures for investments and businesses in India, advising on the most tax-efficient methods for remitting funds.
Understanding the intricacies of Indian tax regulations for Non-Resident Indians (NRIs), we are committed to providing professional assistance, helping you ensure compliance with tax laws and achieve peace of mind.
Benefits of NRI Tax Planning Services
Our NRI taxation services are dedicated to assisting NRIs in achieving their financial goals while minimizing tax liabilities. We offer tailored solutions that optimize tax benefits and provide a deep understanding of international tax laws. With the expertise of our NRI tax consultants, clients can capitalize on exemptions and deductions.
Our NRI Taxation Services Include:
- Filing of Income Tax Returns (ITRs) for individuals or businesses, along with assistance in claiming tax refunds, if applicable.
- Tax planning for minimizing liability on the sale of property in India, including guidance on claiming exemptions under Sections 54, 54F, 54EC, etc.
- Advice on the timing of moving out of or returning to India to optimize tax liability.
- Assistance with avoiding double taxation by leveraging Double Taxation Avoidance Agreement (DTAA) relief between the country of residence and the source country of income.
- Support with income tax scrutiny, assessments, and audits.
- Advisory and assistance for remittances to and from India, ensuring accurate reporting for smooth future repatriation of funds. NRIs can repatriate up to USD 1 million per calendar year, provided the applicable taxes are paid.
- Compliance with Foreign Exchange Management Act (FEMA) regulations related to foreign remittances, along with certification services under FEMA and Income Tax.
- Guidance on investment options for tax deductions under Section 80, including Public Provident Fund (PPF), Life Insurance, Specified FDs, and Home Loan principal repayment.
- Representation services before Income Tax Authorities, CIT(A), and Appeals for tax notices.
- Tax optimization and advance tax planning.
- Housing loan advice and investment planning.
- PAN and TAN application assistance.
- Income Tax Return filing and other related services.
NRI Property Sale in India
The real estate market in India, particularly in growing cities, offers significant investment opportunities for both Resident Indians and NRIs. Many NRIs own residential and commercial properties in India for various reasons, including investment. While selling or reinvesting in property in India is not overly difficult, it comes with specific rules and regulations that differ from those applicable to Resident Indians, making the process more complex. These complexities include understanding procedures, meeting compliance requirements, paying the correct taxes, managing bank accounts for receiving funds, repatriating funds, and adhering to regulations under RBI, FEMA, PMLA, and the Income Tax Act.
This often leads to confusion for NRIs who want to sell, purchase, or manage property in India. We specialize in offering comprehensive property sale solutions to NRIs and individuals from countries outside India who wish to sell their property in India.
Why Choose Us for Selling Property in India for NRIs:
- Acting as the authorized representative for NRIs during the registration process.
- Assisting with transferring property ownership to the NRI’s name if it is not already registered.
- Providing services for obtaining necessary paperwork, drafting and reviewing documents, and preserving essential records.
- Helping open necessary bank accounts for receiving payments.
- Ensuring compliance for individuals purchasing property from NRIs.
We also provide specialized solutions for specific situations, including:
- Sale of property by an NRI to another individual.
- Sale of inherited property.
- Sale of gifted property.
- Sale of agricultural land or farmhouses.
Computation of Tax Liability
Capital gains from the sale of property by NRIs in India are subject to taxation. The tax rate depends on the duration of the asset ownership:
- Long-Term Capital Gains (held for more than 2 years) are taxed at 20%.
- Short-Term Capital Gains (held for 2 years or less) are taxed at the applicable slab rate based on the NRI’s total income.
Lower/ NIL TDS for NRI Selling Property in India
As per Section 195 of the Income Tax Act, TDS is deducted on the sale of property by NRIs:
- 20% of the sale consideration for long-term capital assets.
- 30% of the sale consideration for short-term capital assets.
In most cases, the actual tax liability of the seller is lower than the prescribed TDS amount. To overcome the blockage of funds, NRIs can obtain a lower TDS certificate (TDS exemption certificate) under Section 197 by filing Form 13 online with the jurisdictional officer and submitting the required documents.
Claiming a Refund of the TDS Deducted
If an NRI is unable to obtain a lower or NIL TDS certificate, they can claim a refund by filing an income tax return in India. The NRI’s tax liability is calculated, and any excess TDS deducted can be refunded.
Tax Exemption Options for NRIs Selling Property in India
NRIs can explore several exemption options to reduce their tax liability on the sale of property:
- Section 54: Exemption on long-term capital gains from the sale of residential property in India. The capital gains must be used to buy or construct another residential property within specific timeframes.
- Section 54EC: Exemption through investment in bonds issued by entities like NHAI, REC, and PFC within six months of the property sale. These bonds are redeemable after 5 years.
- Section 54F: Available for long-term capital gains from the sale of assets other than residential property. The entire sale proceeds must be invested in a new residential property within specific timeframes.
CA Certificates like 15CA and 15CB for Remittance of Funds Outside India
We offer support in filing Forms 15CA and 15CB, which are necessary for remitting funds to non-residents or foreign entities.
- Form 15CA: This is a declaration required from the remitter (person making the payment) to the authorized dealer bank before the remittance. It includes details such as the remitter’s and beneficiary’s name, the purpose of remittance, the amount, and any tax deducted at source (TDS).
- Form 15CB: This certificate, issued by a Chartered Accountant, confirms that the payment is not taxable in India or that the appropriate tax has been deducted. It also ensures compliance with the Income Tax Act and the Double Taxation Avoidance Agreement (DTAA) between India and the country of the non-resident.
NRI Returning to India Consultancy
Many Indian citizens move abroad for employment or business and become Non-Resident Indians (NRIs). Some also acquire foreign citizenship (Person of Indian Origin – PIO). Over time, some of these NRIs, OCIs (Overseas Citizens of India), PIOs, or their children may decide to return to India. Returning to India involves various financial, tax, and regulatory considerations, especially regarding Indian income tax laws and foreign exchange regulations.
We offer the following services to assist NRIs and PIOs returning to India:
- Planning the Date and Month of Return: We help plan the return to India to ensure minimal tax liability for the year of return (April to March).
- Conversion of NRO & NRE Accounts: Assistance in converting NRO (Non-Resident Ordinary) and NRE (Non-Resident External) deposits into Resident accounts.
- Conversion of Foreign Currency to INR: Guidance on converting Foreign Currency Non-Resident (FCNR) accounts to Rupee accounts or Resident Foreign Currency (RFC) accounts.
- Compliances Regarding Repatriation of Assets: Support in complying with regulations related to the repatriation of assets to India.
- Re-designation of Indian Bank Accounts: Assistance with the procedure to re-designate all Indian bank accounts as Resident accounts.
- Opening of Resident Foreign Currency (RFC) Accounts: Guidance on opening RFC accounts for managing foreign currency holdings.
- Income Tax Compliance: Help with compliance concerning the Indian Income Tax Act, such as applying for PAN if needed.
- Re-investment of Sale Proceeds: Assistance in reinvesting proceeds from the sale of foreign assets into India.
- Tax Liability Planning: Professional advice on minimizing tax liabilities in India upon returning.
- Filing of Income Tax Returns: Assistance in filing income tax returns in India for individuals returning to India.
Our consultancy services are tailored to help returning NRIs navigate the complex regulatory and financial processes smoothly and efficiently.
Estate Planning for NRIs
A significant number of Resident Indians and NRIs do not have professionally drafted wills, with estimates suggesting that over 80% of individuals lack a proper estate plan. Many people believe that “estate planning” is only for the wealthy, which is a misconception.
In India, millions pass away each year without any estate plan, resulting in their families facing costly and time-consuming legal processes, such as succession certificates or probate proceedings. The challenges become even greater for NRIs, as they often have assets in multiple locations, both in India and abroad.
What is Estate Planning?
Estate planning involves creating a strategy to ensure that one’s estate is distributed according to their wishes. It aims to minimize uncertainty in probate administration and maximize the estate’s value by reducing taxes and other expenses.
Our Estate Planning Services Include:
Estate Planning Drafting/Redrafting/Reviewing:
- Individual Will
- Couple Will
- Family Trust Deed
- Family Settlement Agreement
- Trust Deed for Special Needs Children/Minors
Property Matters Drafting Services:
- General Power of Attorney (POA)
- Special POA
- Release Deed
- Gift Deed
Advisory Services:
- Gift Compliance Advisory
- Bereavement Advisory Services (for those who pass away without a will)
- Succession Advisory for Business and Personal Assets
Our team understands the complexities of NRI taxation and estate planning. We offer personalized services tailored to each client’s unique circumstances, ensuring that your estate is handled in a way that meets your wishes while complying with applicable laws.
Double Taxation Avoidance Agreement Consultancy
Income may be subject to double taxation when it is taxed both in the country where it is earned (the ‘source country’) and in the country where the person earning the income resides (the ‘residence country’). For example, a Non-Resident Indian (NRI) residing in the USA but earning income in India could be liable to pay taxes in both India (source country) and the USA (residence country).
What is Double Taxation?
Double taxation refers to the situation where the same income is taxed twice—once by the source country and once by the residence country. Countries typically tax income based on two main rules: the Residence Rule and the Source Rule. This can lead to double taxation when the taxpayer is a resident of one country but earns income in another.
How Does DTAA Help?
Double Taxation Avoidance Agreements (DTAA) provide solutions to eliminate or reduce double taxation by implementing one of the following approaches:
- Exclusive Right to Tax: One country is given the exclusive right to tax the income.
- Limiting Tax Rates: Both countries are allowed to tax the income, but each country’s tax rate is limited under the agreement.
- Tax Credit: The residence country allows the taxpayer to claim a credit for taxes paid in the source country, thereby reducing the overall tax liability.
We offer DTAA advisory and tax compliance services to both Indian and multinational clients, helping individuals navigate complex international tax laws. Our services also include tax management for NRIs, ensuring compliance with both Indian tax laws and the regulations of the foreign country, in accordance with the relevant Double Taxation Avoidance Agreements (DTAA).
Types of Bank Accounts an NRI Can Open
NRIs can open, hold, and maintain the following types of bank accounts with an authorized dealer in India (a bank authorized to deal in foreign exchange):
- Non-Resident (Ordinary) Rupee Account – NRO Account
- Non-Resident (External) Rupee Account – NRE Account
- Foreign Currency Non-Resident (Bank) Account – FCNR (B) Account
Key Features of These Accounts:
| Particulars | FCNR (B) Account | NRE Account | NRO Account |
|---|---|---|---|
| Joint Account of Two or More NRIs | Permitted | Permitted | Permitted |
| Joint Account with a Resident Indian | Not permitted | Not permitted | Permitted |
| Currency in Which Account is Denominated | Pound Sterling/US Dollar/Japanese Yen/Euro | Indian Rupees | Indian Rupees |
| Repatriability – Principal | Freely repatriable | Freely repatriable | Not repatriable (except for current income such as rent, dividend, pension, etc.) |
| Repatriability – Interest | Freely repatriable | Freely repatriable | Freely repatriable |
| Foreign Currency Risk | Protected against fluctuations in INR value versus the currency in which the account is denominated | Exposed to fluctuations in INR value | Exposed to fluctuations in INR value for interest amount |
| Type of Accounts | Term deposits only. | Current, Savings, Recurring, Fixed Deposits | Current, Savings, Recurring, Fixed Deposits |
| Period of Fixed Deposits | Minimum 1 year, maximum 3 years | As announced by the deposit-taking bank | As announced by the deposit-taking bank |
| Rate of Interest | Determined by banks, subject to RBI ceiling | Determined by banks | Determined by banks |
| Rupee Loans in India (Against Security of Funds) | Account holder: Permitted, Third Party: Permitted | Account holder: Permitted, Third Party: Permitted | Account holder: Permitted, Third Party: Permitted |
| Foreign Currency Loans Outside India (Against Security of Funds) | Account holder: Permitted, Third Party: Permitted | Account holder: Permitted, Third Party: Permitted | Account holder: Not permitted, Third Party: Not permitted |