NRI Tax Services

Non-Resident Indians (NRIs) encounter a range of intricate financial and legal obligations, with taxation standing out as a particularly vital aspect. Non-resident Indians are required to fulfill their tax obligations in accordance with the provisions of the Income Tax Act of 1961 whenever they come under its jurisdiction. NRI taxation encompasses various facets, including income tax, gift tax, and property tax, among others. Managing Indian tax regulations while residing overseas can be a formidable undertaking, so we assist NRIs in overcoming these challenges.

Following is the list of the NRI Services that we provide

 

Lower Tax Deduction / Tax Exemption Certificate

The sale of property by NRIs and OCIs in India is a common transaction, prompting the need for diverse tax and legal services. In this context, the primary focus of NRIs is in obtaining a Lower TDS Certificate or Tax exemption Certificate from the Income Tax Department in various cities across India. We offer Lower TDS Certificate and Tax exemption Certificate services to applicants falling under the Non-Resident category.

Our services in this area include:

 
Obtaining Lower Tax Deduction Certificate: Subject to PAN jurisdiction, we help in obtaining a certificate from the Income Tax Department to limit the tax deducted at source, aligning with the capital gains tax on the property.
 
Our services are designed to support clients through the entire process and obtain the  Lower TDS Certificate or Tax exemption Certificate from the Income Tax Department in various cities across India in a timely fashion.
 
Please note that all consultations with the CA are Paid Consultations

Sale of Immovable in India by NRI

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Many non-resident Indians have made investments in residential and/or commercial properties in India, either for investment purposes or otherwise. However, for many NRIs, the challenge arises when it comes to managing, selling, gifting, or reinvesting these assets in India. Apart from the practical difficulties related to travel and finding potential buyers, the sale of property by NRIs often involves a higher rate of tax deduction at the source, tying up essential funds in India. The entire process of sale, reinvestment, and repatriation typically can take several months, considering the associated tax and regulatory requirements.

We are uniquely positioned to provide a comprehensive suite of solutions for the sale of real estate in India by NRIs. We guide our clients from the planning phase before the property sale, all the way through to the repatriation of the proceeds. Our services ensure a seamless filing of tax returns in both countries, incorporating any Double Taxation Avoidance Agreement (DTAA) benefits that may apply.

Our services in this area include 

Pre-Sale Assistance:

  1. Pre-sale Tax Planning:We assist you in understanding various options, such as reinvestment, repatriation, cash flows, and potential global tax mitigation strategies.
  2. Connecting with Real Estate Consultants:We connect you with empanelled real estate consultants who can provide assistance throughout the property sale process.
  3. Obtaining Lower Tax Deduction Certificate:Subject to PAN jurisdiction, we help in obtaining a certificate from the Income Tax Department to limit the tax deducted at source, aligning with the capital gains tax on the property.

During the Sale Assistance:

  1. Computation of Capital Gains:Ensuring accurate reporting of capital gains for transparency.
  2. Reinvestment Assistance:Providing guidance on reinvesting sale proceeds for optimal returns and exploring suitable investment options.
  3. CA Certification for Repatriation:Facilitating the smooth repatriation and remittance of funds with CA certification.
  4. Hand-holding During the Sale Process:Assisting with queries, clarifications, and addressing buyer's tax issues during the registration process. Dealing with Property Sub Registrar.
  5. Expertise and Support:Our experienced team offers guidance and assistance throughout the property sale process - Dealing with Agents and Buyers, Assistance in negotiations with buyers or sellers (in case of purchase), Cash management, etc.
  6. Engaging an advocate:Engaging an advocate for various aspects of your property transaction such as Due Diligence, Agreement Drafting, Power of Attorney (PoA), Property Registration (only in Mumbai), Legal Counsel, etc. By collaborating with an advocate, you can navigate the legal intricacies of the property transactions with confidence, ensuring that your rights are protected, and the transaction is legally sound.

Post-sale Assistance:

  1. Filing Income Tax Returns in India:Handling the filing of income tax returns in India to ensure compliance with tax regulations.
  2. Repatriation of Funds:Facilitating the repatriation of funds from your Indian bank account to your overseas bank account and providing CA certificate - Form15 CA/CB for banks to initiate the transfer.
  3. Double Taxation Treaty Benefits:Helping you leverage the Double Taxation Treaty between India and the foreign country to minimize tax liabilities and avoid dual taxation.
  4. Assistance with Income Tax Assessment Proceedings:Providing support and guidance in income tax assessment proceedings, ensuring a smooth resolution in case such situations arise.
Please note that all consultations with the CA are Paid Consultations

Computation of Capital Gains Tax

NRIs often acquire immovable property in India, either through personal investment or inheritance. When they decide to sell the property, various tax-related questions and concerns arise. Here's an overview of the common queries and considerations related to the sale of immovable property by NRIs:

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  1. What is the valuation of property acquired through inheritance or gift?
  2. In the case of property acquired at a time when prices were significantly lower, how is the gain calculated?
  3. How are expenses paid to individuals other than the seller treated in the context of a property transaction?
  4. What is the significance of Stamp Duty Valuation, specifically referring to the Circle Rates of the Stamp Duty Valuation Authority?
  5. How can one minimize or avoid capital gains tax arising from the sale of property?
  6. What are the specific TDS provisions for NRIs concerning the acquisition or sale of immovable property?
  7. How is the overall taxation handled when selling a property?

Our services in this area include 

  1. Valuation of Property purchased before 2001: We partner with team of Qualified Government Approved Valuers for Property Valuation Report that is mandatory for Capital Gains Tax. All Property Valuations are conducted by Qualified Government Approved Valuers. The fees for processing the Property Valuation varies depending upon they type of property (Land vs Flat vs others) and location of Property.
  2. Computation of Capital Gains Tax: Ensuring accurate calculation of capital gains and computation of correct amount of taxes on such capital gains.

Repatriation and Remittance

NRIs, OCIs, and PIOs are permitted to repatriate the sale proceeds from residential property outside India, subject to certain conditions.

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Our services in this area include 

  1. Analyzing Permissibility of Fund Repatriation or Remittance:Assessing the feasibility and permissibility of repatriating or remitting funds based on the specific circumstances.
  2. Advising on Prevailing Limits or Conditions:Providing guidance on the existing limits or conditions associated with fund repatriation or remittance, if applicable.
  3. Providing a CA Certificate (Form 15CB):Supplying a Chartered Accountant (CA) certificate in the form of Form 15CB, certifying compliance with tax regulations and other relevant requirements.
  4. Assisting with Submission of Self-Declaration (Form 15CA):Facilitating the completion and submission of the self-declaration in the form of Form 15CA, which is a prerequisite for repatriating funds out of India.

Our comprehensive suite of services aims to ensure a seamless and compliant process for clients seeking to repatriate funds, providing them with expert analysis, advice, and the necessary certifications for a successful transaction.

NRI Business Setup in India

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Setting up a business in India offers significant opportunities for NRIs and FIIs given the vast consumer base. However, navigating the regulatory landscape and compliance requirements is essential. India's ranking on ease of doing business is relatively low, highlighting the importance of understanding and adhering to various laws and regulations. Decisions regarding the establishment of a registered office and manufacturing facility need careful consideration, particularly as specific regions offer benefits for manufacturing setups.

Key considerations for business setup in India include:

  1. FDI Policy:Understanding the Foreign Direct Investment (FDI) policy, which dictates the permissible investment limits for individuals from outside India. Collaboration with local partners may be necessary in some cases.
  2. Nature of Business and Entity Setup:Deciding on the nature of the business and whether it will be established as an Indian entity or a foreign entity, such as a Liaison office, Project office, or Branch office.
  3. Location Benefits:Exploring excise/custom and income tax benefits available to certain businesses and specific locations in India.

Our services in this area include 

  1. Entry Strategy and Structuring Advice:Providing guidance on the most effective entry strategy with proper structuring for business setup in India.
  2. SEBI Registration for FIIs:Assisting with Securities and Exchange Board of India (SEBI) registration for Foreign Institutional Investors (FIIs) either as a main account or sub-account.
  3. Entity Creation and Registrations:Facilitating the creation of entities along with the necessary registrations and approvals.
  4. RBI and FEMA Compliance:Ensuring compliance with regulations set by the Reserve Bank of India (RBI) and the Foreign Exchange Management Act (FEMA).
  5. Ongoing Compliance and Services:Managing continuous compliance with laws, offering accounting, payroll, and tax services.
  6. Exit Strategy Advice:Providing guidance on exit strategies when necessary.

Our services are designed to support clients throughout the entire process, from initial setup and compliance to ongoing operations and potential exits.

Please note that all consultations with the CA are Paid Consultations
 

FAQs

Question - Do you assist NRIs & Foreign Nationals with Income Tax Notices?

Answer - In the past one to two years, there has been an increased trend wherein Non-Residents (NRIs, OCIs) residing outside of India have been receiving notifications (such as e-campaign notices, Sec 148A/148 Notices, etc.) from the Indian Income Tax department regarding financial transactions conducted by these individuals within India. This development has sparked widespread concern among the Non-Resident community regarding the appropriate course of action upon receiving such notices. 

Non-residents (NRIs, OCIs) engage in various financial transactions in India. However, they typically refrain from filing Income Tax Returns (ITR) in India based on certain assumptions:

  1. They believe that the financial transactions are conducted using funds from foreign sources, which are not subject to taxation in India.
  2. They assume that their Indian income falls below the taxable threshold.
  3. They rely on Tax Deducted at Source (TDS) to fulfill their Indian income tax obligations.

Nevertheless, in the absence of an ITR, the Income Tax Department seeks to verify whether there has been any evasion of tax liability and the source of these financial transactions undertaken by non-residents. To achieve this, the Income Tax Department commonly issues the following types of notices under the Income Tax Act, 1961:

  1. e-campaign notices
  2. Notices under Section 148A
  3. Notices under Section 148 to file an ITR
  4. Initiation of a Scrutiny Proceeding and issuance of a detailed Questionnaire Notice under section 142(1)

At CA Mitesh & Associates, we are a team of Chartered Accountants, Lawyers, and Other Experts dedicated to providing comprehensive tax litigation services to Non-resident clients (NRIs, OCIs). Here are some of the key aspects of our service offerings:

  1. Handling Notices: We adeptly handle notices served to Non-residents under different sections of the Income Tax Act, including but not limited to sections 148, 148A, 147, 142(1), 143(2), 144, and 131.

  2. Preparation of Submissions: We meticulously prepare comprehensive submissions aimed at resolving litigation at the initial level, ensuring a robust defense for our clients.

  3. Expert Consultation: We provide access to the best experts in the field to address and resolve complex tax issues efficiently.

  4. Liaison with Tax Officials: We facilitate communication and liaison with tax officials wherever necessary to expedite the resolution of tax matters.

  5. Client Consultation and Strategy: We engage in thorough discussions with our Non-resident clients to elucidate the significance of notices and devise effective action strategies tailored to their specific needs.

  6. Strategic Advice: We offer strategic advice to Non-resident clients to adopt proactive measures to address and mitigate potential tax notices effectively.

  7. Pan India Presence: With our strong online presence, we are able to effectively assist and handle tax litigation matters for PAN India.

  8. Extensive Experience: With a wealth of experience, we have been consistently providing top-notch tax services to Non-resident clients, catering to their diverse needs and ensuring favorable outcomes.

At CA Mitesh & Associates, we are committed to delivering exceptional service, strategic guidance, and effective solutions to our Non-resident clients, helping them navigate the complexities of tax litigation with confidence and ease.

 

Question - What  documents and information is needed to for obtaining a Lower Tax Deduction at Source (TDS) Certificate or TDS Exemption Certificate.Answer - For NRIs, PIOs, and OCIs, the following checklist outlines the necessary documents and information for preparing an online application for a Lower Rate TDS Certificate or TDS Exemption Certificate:
  1. Copy of Applicant's PAN Card
  2. Income Tax Login details of the Applicant, if already established
  3. TRACES Login details of the Applicant, if already created
  4. Copy of Passport
  5. Pages of Passport indicating entry and exit dates to and from India
  6. Copies of Income Tax Returns (ITR) for the past two years
  7. Bank statement showing advances received from the buyer
  8. PAN and Aadhar of the Buyer
  9. 26AS statements for the current year and the preceding two years
  10. TDS Account Number of the proposed TDS Deductor (buyer in the case of property sale-purchase transactions)
  11. Computation of Capital Gain or other relevant income pertaining to the current transaction
  12. Documents related to the present transaction (e.g., Agreement To Sale for property sale transactions)
  13. Supporting documentation for computation purposes (e.g., documents related to property purchase and payment)
  14. Any additional documents pertinent to the specifics of the case or as required by the Income Tax Department office.
 
Question - What assistance can you provide during my property sale transaction in India?Answer - We offer a comprehensive end-to-end service tailored for NRIs/PIOs. Based on our extensive experience, NRIs/PIOs typically seek the following services concerning the sale of immovable property in India:

Pre-Sale Services: We offer comprehensive pre-sale services, including the review of the Sale Agreement and providing advisory within the framework of the Income Tax Act and other relevant laws. We advise on the optimal date selection for the sale deed and recommend the appropriate bank account for receiving/depositing the sale consideration.

Computation of Capital Gains: Our team meticulously verifies the documents related to the purchase, improvements made, sale, and expenses incurred during both purchase and sale of the property. We apply relevant indexation to costs and improvements and compute the Capital Gains in accordance with the provisions of the Income Tax Act.

Capital Gains Exemption Claim: We assist our NRI/PIO clients in exploring various tax-saving schemes available for capital gains, such as investing in a new house, purchasing bonds, or depositing funds in a capital gain tax-saving bank account. Our goal is to help clients minimize their tax liabilities while maximizing their savings.

Computation of Taxes and Payment: After implementing tax-saving strategies, we calculate any taxes payable. If taxes are due, we assist in the timely payment to avoid interest or penalty liabilities. Once taxes are paid, the remaining funds are available for repatriation outside India or any other use as desired by the client.

Repatriation of Funds Outside India: We provide guidance on the process of repatriating funds outside India, typically under the RBI's USD One Million Scheme. This involves obtaining necessary documents, including a CA certificate (Form 15CB) and RBI Acknowledgement in Form 15CA, as required by the banker. We assist in completing these documents and facilitating the remittance of funds outside India.

Filing Income Tax Returns (ITR): We prepare and file Income Tax Returns with the Indian Tax Department, taking into account capital gains calculations, investments made, and taxes paid. Our aim is to ensure compliance with tax regulations and fulfill all legal obligations.

General Advisory: In addition to the above services, we provide general and specific advisory regarding Income Tax and FEMA regulations related to sale and repatriation transactions of immovable property. We strive to address any concerns and provide clarity on tax implications and compliance requirements.

Record-Keeping: We advise clients to obtain, organize, and secure various documents that may be important for future inquiries under applicable laws, such as the Income Tax Act. Furthermore, we maintain records of documents obtained from clients for any future reference or requirement.

 
Question - What is the impact of TCS on Non-Residents?Answer - Non-residents who previously received funds from resident relatives in India may experience reduced cash inflows due to banks collecting Tax Collected at Source (TCS) on the remittance amount. Consequently, if a resident Indian intends to send a gift or other remittance to their non-resident relatives (NRI, foreign citizen), the total available cash flow will also be subject to TCS deductions by the bank. As a result, the remittance amount received by non-residents will be diminished, leading to a decrease in cash inflows.

Why Us?

NRIs seek comprehensive information and guidance regarding legalities and procedures concerning assets held in India and the taxation of income and profits/gains on asset sales. This includes:

  1. Regulations pertaining to the operation of bank accounts, repatriation of income/funds, and special RBI schemes for returning NRIs.
  2. Regulations governing investments in shares, debentures, mutual funds, government securities, and bank deposits, along with their taxation.
  3. Procedures for the purchase/sale of immovable property in India and/or renting the same.
  4. Tax planning strategies and compliance requirements.
  5. Addressing queries related to Indian taxation, DTAA/Tax Treaty benefits, FEMA, and RBI procedures and approvals.
  6. Assistance in obtaining permission for repatriation of assets/income and compliance with mandated procedures.
  7. Support for returning Indians and recent immigrants.
  8. Guidance on setting up new businesses/charitable institutions.
 
Additionally, NRIs seek services to handle all formalities of RBI, Income Tax Department, banking accounts, etc., in a convenient and cost-effective manner. At CA Mitesh & Associates, we offer a streamlined system that is highly efficient and economical, requiring minimal personal interactions. Communication is primarily conducted via email or WhatsApp or phone calls as needed. Our approach ensures that NRIs can manage their tax and FEMA matters seamlessly, allowing them to enjoy their visits to India without hassle.
 
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