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NRIs stands for non resident Indian, who want to invest their money in India visit S2NRI.com. This site specially built to cater the needs of Non Resident Indians. One Point Solution for all your needs in Mumbai INDIA

What Do You Need To Require for Opening NRO Account?

What Do You Need To Require for Opening NRO Account?

If you’re going to the foreign country, check your bank status.

Have you changed it?   

Do you know the overall changes that you require to do with your bank account books?

First, you should know about the NRO account. It stands for the Non-Resident Ordinary (NRO) Rupee A/c. It is a necessity to close any kind of saving, current or fixed account. But you need to have an account called the NRO a/c. Rather than closing an old account, you should change it into this one.

What’s an NRO A/c?

The Indian government orders banks to facilitate a saving account to NRIs. It lets the PIOs (Persons of Indian Origin) and OCIs (Overseas Citizen of India) to do banking through the NRO banking channel. Being a saving account, the immigrant Indians can stockpile their income via, let’s say, rent, dividends, pension from abroad and so on. It offers convenience in managing and keeping your money safe. Several banks, like HDFC, ICICI, SBI, and much more, open this non-resident ordinary rupee account. However, the terms and conditions vary from bank to bank.        

Apart from the remittances between India and foreign, it allows local payment. Unlike an NRE or Non-Resident External Rupees account, you can keep the deposit safe in Indian currency.

Here is the list of ‘what-to-do’ before taking adieu from the home country:

  1. Change the Status:

As stated above, this NRO account ensures smooth, seamless and legible transactions. The Indian diaspora in any country can manage deposits and investment in India through it. You must know that the banks remit foreign currency. If you have a joint account, it’s well and good. Many banks allow you to have it as per RBI rules. But the joint account holder should be an Indian. Even, repatriation is permissible for such a/c holders. Make the mindset that such account permits certain repatriation not a full annual amount.

  1. What Documents are Required:

For opening it, you must provide your valid non-resident proof. That document can be a tax return file, or any other income proof. It’s so because the tax laws enforce scripting NRI status on the document. The RBI strictly bars the non-residents from keeping any residential bank a/c.

  1. Proof of Residence & Status:

Being an NRI, you’ve to provide some documented proof. This is how the conversion process of resident account into non-resident account initiates. Catch on the list of the proofs that you can submit:

  • Identity proof, like Ration Card, PAN Card, Voter ID etc.
  • NRI status proof, like appointment letter of foreign employer or student visa
  • Proof of foreign address
  • Two photographs
  1. Proof of Indian Residency:

What would you show to prove that you’re a non-resident?

As I dropped a clue in the second point of the former section, it can be any letter of foreign employment. If you’re going for studying in abroad, a student visa can be that proof. And if you’re a spouse of the NRI, the dependent visa status can do the trick. Besides these, a photocopy of the resident permit offshore can help you to prove the changed status.

All aforementioned documents should be notarized. Subsequently, the applicant needs to go to the attestation service in India as well to authenticate the evidences. This is why the bank authority accepts all these documented evidence.

  1. Attestation:

When you apply for the visa or passport, every document requires document. It’s already stated that the applicant has to provide the Indian as well as foreign resident proof. When you come with these document proofs, they require to be attested.

How NRIs Can Make More Money via Investment In India in 2017?

How NRIs Can Make More Money via Investment In India in 2017?

Are you soon settling in the foreign country?

Do you have Public Provident Fund (PPF) account and National Saving Certificate (NSC)?

If yes, you must be updated with the current update. But first, let’s catch a brief over PPF account.

What is PPF account?

As stated above, PPF stands for the Public Provident Fund. It’s a long term investment plan. The government imposes no tax over it. It implies that this 15-year long investment plan gives a sigh of relief from the tax. The smart parents or guardians go for this investment on behalf of their minors. It safeguards INR 500 to INR 1.5 lakh for 15 years with the benefit of high interest rate. Currently, the investor gets 7.8% interest rate over such kind of investment.

Until this year (2017), the non-resident diaspora was delighted to save tax via it. But the recent update has disappointed them. The tax free investment for NRIs via PPF is forbidden. Only residents of India can sink money into this government scheme.

What’s the update regarding PPF and NSC?

If you’re likely to shift abroad, you must know that:

  • Your PPF account would be deemed close.
  • The NSC will return you the interest amount @ 4% that is currently prevalent in the Post Office saving account.

Earlier, it was yielding 7.8% return on the overall PPF & NSC account investment. But now, this practice is over.

Let’s consider a scenario wherein you are likely to shift in the foreign country. You hold a PPF account that makes you worthy to accumulate the interest of 7.8% over total investment. The day you shed off your residential status, your this account would be closed. And the interest rate would be slashed to 4% as per post office saving account’s rate. But the slashed interest rate would be applied from the previous month when your PPF account was closed.

It implies that your account would be matured before its actual maturity date. This is why you need to encash the accumulated amount when you become an NRI.

How can you save more money after this update?

The financial advisors recommend that it would be a wise idea to encash the invested amount. The accumulated amount should be withdrawn. If you want to invest it further, it’s better to sink your amount into the equity that offers repatriability of Indian investments. Go through the tax intricacies as well.

NPS-the best money saving investment for NRIs:

National Pension System (NPS) is one of the best investment options in India (2017) if you’re planning to re-settle in India. It conserves your money for the long term after retirement. Besides this, you’d get a golden chance to multiply your amount via a great rate of interest.

But, do remember to look into the foreign investment rules of the resident country. Some countries will not charge any tax if you have paid it in India over your capital income. Let’s say, you’re living in the US. You have to reveal the source of ‘how much’ equity as well as asset you possess. The tenet of FATCA makes you bound to its rules. The US tax authority would definitely want to know your total investment and annuity. This is how it would compute the amount of tax over your income.

On the other side, the Gulf countries would not seek access to such investment details. Neither do they impose taxes on the income sourced through Indian asset or equity. Therefore, if you desire to resettle in India after a long stay in such countries, NPS will be a good alternative.

Is Agricultural Income from Abroad is Taxable in India?

Is Agricultural Income from Abroad is Taxable in India?

India is an agro-based country since approximately 70% of its population earns bread and butter through farming. But farming is not the only composition of agricultural income. There are many associated works that generate income, like renting out the agro-land. This facility is available for the natives of India. But an NRI can’t invest in the purchase of agriculture land or farm house in India.

Let’s catch on details about the agricultural income sourced from India and abroad.

What is agricultural income in India? 

The revenue generated through farming or agricultural land, buildings or commercial produce from such land is considered as the agricultural income in India. Its details are mentioned in Section 2(1A) of the Income Tax Act.  Ownership, here, does not matter. Suppose a non-resident takes farming land on lease for earning through farming, it would be considered as income from agriculture.

If the revenue is by any means connected with agro-land, it would be counted as the revenue from cultivation. This revenue can be generated through sale of the processed crop. The sale of timber drawn from the trees of such land will also be a part of this income.

There is another situation when the same land or building, like storeroom, outhouse or residential place on/around it is rented out. That rent will be a source of agriculture income.

Taxability of agricultural income from India:

A clause under Section 10(1) of Income Tax Act declares that the income from cultivation shall be exempted from tax. It means that the central government can’t levy any tax on such kind of income.

Please underline that state government can levy tax on the same. But this possibility will arise when the income would exceed INR 5,000 in a financial year. The form ITR 1 or ITR 2 should be filled for income tax return. Conversely, the lesser money earned than the said income shall be exempted from the tax.

Taxability of agricultural income from abroad in India:

Although agricultural income is free from the payable tax under prescribed conditions, but if the same is sourced through the foreign agricultural land, the revenue would be ‘taxable in India’. On consulting this matter with any trustworthy outsourcer who deals in NRI services, the concept of tax will be clearer. This condition will be underlined as the ‘Income from Profits and Gains of Business or Profession’ or ‘Income from Other Sources’.     

How to calculate income tax over the foreign agricultural income?    

Be it the revenue from house property, business, salary or any other source, such income will be taxable. For the NRIs, the revenue generated from the cultivation abroad will fall under the head ‘Income from Other Sources’. Therefore, it would be taxable. The NRIs can consult any reliable entity deals in NRI investment services to dispel confusion over it.

Let’s check how tax is calculated in such condition.

  • When the income is derived from the agriculture land: Take an example. An NRI invested in farming in Canada and earns INR 200,000. Alongside, he is a salaried employee whose monthly income is, let’s say, INR 1 lakh. He generates revenue from dual sources. His salary will be known as base income whereas the former income will be agricultural income.

Now, the tax shall be computed by adding base salary with the agricultural revenue. Then, the output will be multiplied by the fixed tax, let’s say 20%, as per slab. The computation will be like this: 20% (INR 100,000 + INR 200,000) = 20%X INR 300,000 = INR 60,000.

  • When the tax slab changes: The tax slab undergoes revision every financial year. Therefore, it impacts the computation of tax. To cope up that amendment, the computation would be like this: Tax (Basic Tax Slab + Agriculture Income).
  • How much tax is payable?

When the foretold cases are computed carefully, the final computation of tax is to be done. It should be like this: T (Base Income + Agriculture Income) – T (Basic Tax Slab + Agriculture Income).

Best Investment Tips to Choose Bank for NRIs in India

Best Investment Tips to Choose Bank for NRIs in India

The rules and regulations of various investment plans in India are revised time to time. NRIs (None- Resident of India) stay cut off from India for the long duration. Meanwhile, finance sector continues to revamp. Failed and unprofitable policies are shredded. New investment policies are introduced to breathe fresh life in to it.

But many NRIs overseas remain blind-folded to such changes. And they continue to invest money as per old books whenever they fly down to India. India diaspora in foreign must bear in mind the frequent revamping procedure of policies and their execution. It’s the first as well as extremely vital viable tip for investment in India.

Let’s move on to find answers of the following investment-centric questions that often hit off the mind of NRI investors.

Tips for NRIs to invest in India:

  1. Should NRIs focus on interest rate?

India is a heaven when it comes to investment. Can you guess how much interest do the American banks provide on deposits? It’s around 1 % only.  And if compare to SBI in India, this rate lies in between 4% and 5% on saving account deposit. Moreover, this interest rate spikes if the investor chooses fixed deposit plan.

However, higher interest boosts the possibility to choose the giver bank. But they can’t underestimate the overall services and facilities.

It’s noteworthy that India has many public and private banks. And each bank has a right to fix the interest rate on saving bank deposits according to their desire after October 25, 2011. But the Reserve Bank of India (RBI) has executed two rules. According to it:

  • All banks must unanimously offer the same interest rate if the depositor’s amount caps under INR 1 lakh.
  • If the deposited amount exceeds INR 1 lakh, the bank can choose variable interest rate on saving bank account. But that interest rate in its different branches must be identical.
  1. Should customer support be a concern?

Will you ever want to deposit in the bank that promises to pay higher interest rate? Of course, it can’t be neglected but you can’t ignore customer service as well.

Just think of the bank that assures more than 8 % interest on recurring deposit (RD) for one year. The bank customer support hid that mid-year liquefying would provide half of the interest offered. And when you asked for liquidity, the customer care executives did not satisfy your queries.

Therefore, it is one of the best investment tips for NRI in India to look into the customer support facility intensely. He must check if the bank provides customer support overseas where he lives and also, in India. Such attention would cut off prospective losses that may occur due to ignorance.

  1. Should the bank have branch overseas?

Would you ever like to invest in Swiss bank although you live in India? For sure, it’s like fool’s paradise if you take such decision. The depositor must check if the bank offers facilities to NRIs in India as well as abroad, where he lives. Thereby, you can easily check the upgraded bank offers and services through accessible customer support.

  1. Should free gifts matter when they choose bank?

However, almost all Indian banks offer same interest rate to NRIs. So, they introduce various lucrative schemes like tax reduction, special discounts on online shopping, free gifts and credit cards etc.. These schemes tend to attract them but the depositor must bear in mind the overall facilities. Gifts and offers are momentary. The scheme remains valid but only for specific duration. Therefore, be attentive while choosing your bank.

  1. Does the bank provide deposit insurance?

Every account in India is insured through deposit insurance that promises stability. But all banks don’t protect NRI’s account. So, browse all these details also.