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Month: October 2019

Services2NRI Assists In NRI Investment Services in India
Services2NRI Assists In NRI Investment Services in India

Services2NRI Assists In NRI Investment Services in India

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The non-residents have a ton of investment opportunities in India. But, the lack of sufficient knowledge and the fear of being fooled often make them reluctant. However, the Indian economy is getting stronger by the day, which is a positive sign for those who intend to invest here.

Services2NRI, being an experienced financial consultant, has gained ground in offering assistance in NRI investment services. The radius of our services covers all these non-resident services:

  1. Fixed Deposits: The fixed deposits are investments that remain barred from market fluctuations. In other ways, the inflation does not cast impact on their interest rate earned. It means that the investor can enjoy fixed income through their interest for that particular tenure.

Also, the principal amount consistently increases without being a failure.

  • NRE FD: This account allows expats to secure high term deposits, wherein the foreign currency converts into rupees. The interest rate varies as per bank. The non-residents can remit their money in an Indian account.
  • NRO FD: Like NRE FD account, it is also meant for a term deposit in allows fund transfer into the foreign account. But, the amount in this account is taxable, as its limit is up to $1 million. It can be opened jointly.
  • FCNR FD: This account for the term deposit ensures saving foreign currency. The interest earned on this NRI investment is repatriable to the depositor’s country of residence without any restriction. It remains unaffected from the market fluctuation.
  1. Mutual Funds: They are the risk-prone investments that are governed under the strict regulations of the Securities Exchange Board of India (SEBI). Being a subject matter of risks, the Indian diaspora often seconds the thought of this investment.
  • Equity: It typically refers to the amount of money that is returned to the company by liquidating assets and paying off the debts. The expats with the Indian passport can park their money in it as a long term deposit because it is tax free after one year.
  • Debt Funds: Those who want to invest the majority of their corpus in fixed income or fixed interest, the debt funds, such as a money market instrument, corporate bonds, treasury bills and government securities etc., bring the best opportunities.
  1. Direct Equity: Investment in the direct equity means investing in stocks of a company. If you have enough knowledge about the National Stock Exchange of India (NSE), it attracts a dozen of opportunities.

For being a part of this investment plan, the NRIs should have:

  • An NRE/NRO account solely dedicated to PIS purposes
  • A dematerialized account for holding electronic shares
  • A SEBI trading account with a registered broker
  1. Real Estate/Property: The majority of non-resident community prefers parking their hard-earned money into property. Since it accumulates capital gain through rental income or the sale of the property, the owners seek assistance, or virtual assistance in property management services. Services2NRI supports in these property-based matters:
  • Buying/selling assistance
  • Encumbrance /Khata/ Patta/ 7/12 Certificate
  • Tenant Management/ Vacating Inspection
  • Utility Bill Payment
  • Property Monitoring
  1. Bonds & Convertible Debenture
  • PSU Bonds, a short for Public Sector Undertaking bonds, are about lending money to a company on the promise of being repaid with the interest on a specific date. The creditworthiness of the bank determines its interest rate
  • Non-Convertible Debenture determines investment in bonds, wherein the interest rate is higher than the convertible debts, but involves less risk. When withdrawing, the bond holder is repaid with cash in full.
  • Perpetual Bonds are the bonds with no maturity date to be paid out. But, the issuing company pays the return at the end of a particular tenure. The principal amount cannot be redeemed.
  1. Government Securities: These investments are announced to finance day to day governmental operations, military operations and infrastructural development. The Reserve Bank of India (RBI) auctions the T-bills for 3 to 12 months. Unlike any interest rate, they promise a coupon to be redeemed on a discount.
  • Fixed Rate Bonds: These bonds ensure a fixed rate of interest on investment.
  • Floating Rate Bonds-These bonds offer interest according to the market fluctuations.
  • Capital Index Bonds: These bonds allow coupon payment rate, which is adjusted corresponding to the inflation rates.
  1. Certificate of Deposits: Unlike FDs, these are a small term investment, which is saleable. The person needs a dematerialized account for its purchase and selling.
  2. National Pension Scheme (NPS): It is the best investment plan to save money for retirement. However, the account holder shall be in between 18 years and 60 years of age.

It locks all payments until retirement. If you retire at 60, this scheme allows withdrawal of 40% of the corpus amount. On the other hand, the withdrawal rate would be limited to 20% if you want to get it before 20%. The rest of the amount must be invested in the annuity.

  1. Wealth Management: It merges both financial planning and specialized financial services, including personal retail banking, estate planning, legal and tax advice and investment management It aims at conserving and sustaining wealth. Services2NRI deals in these wealth related matters:
  • Attending to IT Notice
  • Tax Authority Visits
  • Arranging Lawyers , Legal Opinion
  • Filing IT Returns
  • Legalisation, Notarization, Attestation of Documents
  • Court Visits
  1. Finance Consulting: Mostly, you skip settling the insurance account or its matters at the time of immigration. Services2NRI lets you sort out such challenges that are in the context of insurance and loan, specifically these services:
  • Insurance(Life Insurance, Mediclaims Insurance, General Insurance)
  • Loan Syndication
  • Document Attestation

NRI Property Selling-Based Tax Exemptions in India
NRI Property Selling-Based Tax Exemptions in India

NRI Property Selling-Based Tax Exemptions in India

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The Indian diaspora in the foreign might have a score of queries regarding the property selling and their tax implications. Many of them often fail to access accurate information over it.

This blog covers all those pain points and the areas capital gains & exemptions on them after selling the property.

Let’s begin with a very common scenario wherein an Indian is shifted to the U.S.. Although he is living there, he has been managing property in India. While managing that property, he has been generating rental income for a fair four years. In legal terms, it is a long term capital gain for him.

Go through the difference between long term and short term capital gains.

  • Long term capital gains- These are the gains that one can get through rental income upon owning the property for the minimum of 2 or more years.
  • Short term capital gains-These are similar to long term gain, but the ownership of the property will be less than two years old. The rental income generated during that tenure will be termed as a short term capital gain.

NRIs deduct TDS on the sale of property:

The tax will be deducted according to long or short term capital gains. The cases of inherited property would not be barred from the TDS.

The long term capital gain shall be taxed 20%, whereas the percentage for short term capital gain shall be 30% in India. When the NRI sells that property, the buyer shall have to deduct the TDS.

In the meantime, the non-resident can claim for exemption under Section 54 and Section 54EC. But, this exemption is valid for long term capital gains sourced from the sale of the property in India.

Tips to win exemptions from long term capital gains to save tax on the sale of NRI property:

There are certain terms and conditions drafted regarding the sale proceeds of the property and exemptions. Upon satisfying these conditions, you can win them:

  • Invest in the property within one year before the date of transfer or, wait for years after that
  • Construct a house within three years after the date of transfer
  • The constructed property would remain unsold within three years of purchase
  • The new purchased or constructed property shall be located in India
  • You do have more than one residential property on the date of transfer
  • You do not invest in the new property within a period of two years or construct within a period of three years after such date

Once you satisfy these conditions, no tax on the capital gains would be levied. And, if you invest a part of the sale proceeds, the exemption will be proportionate to the invested amount to the sale price or exemption.

Tax exemption on the sale of NRI property under Section 54EC:

What if you do not want to invest in the property again?

Well, you still have an option to save on tax in such case. You can invest in certain bonds, which are:

  • National Highway Authority of India (NHAI)
  • Rural Electrification Corporation (REC)

Your investment in these bonds will be redeemable after five years. Simultaneously, you cannot sell them before the lapse of three years from the date of sale of the house property. You will have six months duration upon the sale to invest in these bonds. It is recommended to invest before the return of the filing date. As far as the limit is concerned, you can invest max to max INR 50 lakhs in a financial year in these bonds.

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