NRI Services Archives - Page 2 of 3

NRIs Need PAN No. for These Transactions besides Tax Payment

March 6, 2017 Manoj Sodhani Comments 0 Comment

Do you think PAN card is required for tax payment only? Indeed, it should be provided at the time of tax payment. But there are certain more arenas where this unique number is mandatory requirement for emigrants, like NRIs.

Let’s catch on the conditions/ transactions when Permanent Account Number, that is a 10-digit unique alphanumeric number, is asked to present.

For getting rid of higher tax deduction at source: It’s a provision in the income tax law under Section 195 that PAN number should be essentially provided. Otherwise, any residents or non-residents have to encounter higher tax deduction at source. In case their payable interest exceeds INR 10,000 and the number is not provided, the bank is free to cut TDS @ 30 percent.
For providing HRA benefit to the tenant: If the non-residents earn rental income more than INR 1 lakh a year, their unique account number must be provided to the tenant so that he/she can get HRA benefits.
For mutual fund (MF) investments: If the invested MF amount is under INR 50,000, there is no need to provide the unique ID no.. But if the MF investment exceeds this limit, the emigrant has to hand over this number along with his photograph & address proof as a mandatory formality of Know Your Customer (KYC).
For refund from Income Tax department: The aim of income tax return is to pay the income tax over the income that surpasses the threshold limit. Emigrants can get more refund against the tax paid through forwarding this card number. If their income does not fall under the cap of taxable income, they need not provide it.
For demat account: To open a Dematerialized Account for buying stocks & shares, emigrants must quote their PAN number.
For FD investment: However, the natives of India must quote this number only when their investment in Fixed Deposit surpasses aggregate INR 5 lakh in a financial year. But emigrants have to do so compulsorily for taking benefits out of NRI services in abroad and indigenously.
For purchase of foreign currency: Immigration arises the need of currency exchange. Therefore, the emigrants have to mention their unique ID no. for converting INR into the foreign currency.
For prodigal hotel/restaurant bill: The Income Tax rule 114B mandates mentioning of this number if the restaurant or hotel bill exceeds INR 50,000 but only a time.
For investing in RBI bonds: As stated above, the investment by emigrants in stocks and bonds would be permissible if the unique ID number is provided.
For cash/cheque deposit/pay order: If the cash/cheque deposit/pay order exceeds INR 50,000, the emigrants have to quote their Permanent Account Number in the form.
For premium payment: The emigrants investing aggregate amount over INR 50,000 as life insurance premium in a financial year would be worthy to quote PAN details mandatorily under Section 114B.
For sale/purchase of unlisted company share: This card number is mandatory if the emigrant expends INR 1 lakh or more in the unlisted company shares.
For the purchase of immovable property: NRIs are barred from buying any agricultural land in India. Except it, they can invest in any kind of immovable property provide that they forward their unique account number with other documents.
For sale/purchase of goods & services: Section 114B mandates this number on the payment over INR 2 lakh for purchasing goods and services.
However, NPS investment falls under tax-exempt bracket but if the amount exceeds INR 50,000, the applicant has to showcase PAN card for withdrawing it.

However, this card is mandatory but in case the emigrant does not have it, he/she can fill Form 60 alternatively.

Best Investment Tips to Choose Bank for NRIs in India

February 28, 2017 Manoj Sodhani Comments 0 Comment

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:

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.

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.

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.

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.

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.

How OCI Card Is Helpful in Immigration?

October 7, 2016 Manoj Sodhani Comments 1 comment

OCI Card

Immigration is a complex process. A lot of hassles barricade an individual while shifting. Like other countries, Indian government has empowered foreigners, Person of Indian Origin and non-residents’ diaspora with hurdle-free traveling through OCI (Overseas Citizen of India) card.

However, foreigners are eligible to get this card but there are certain exceptions. For example, the citizens of Bangladesh, Pakistan or any such nation that the Central Government declares ‘ineligible’ shall be impermissible.

Let’s take a look who is applicable for owning it indeed.

Who can have it?

It is a must to notice what the Section 7A of the Citizen Act states. It consists of the vital information that describes who is eligible for obtaining this card.

The foreigners who can register must be:

Indian native at or onwards the time when its constitution (in 1950) was written.
Eligible for procuring citizenship of India on 26^th January 1950.
Of the territory that was acquired by India after 1947.
The minor child/ grandchild/great grandchild of the aforementioned person.
The minor child whose both or either parent were Indian citizen.
The spouse of the OCI card holder.
The child/ grand-child/ great grandchild of the parents who were Indian citizen (as per provision of the Government of India Act (1935).

Inapplicable are those who

Belong to Pakistan, Bangladesh or any other country that shall be specified by the Central Government.

How one can get an OCI?

The request for its issuance is now processed digitally. The government has sped up its processing by introduced its registration from its formal website. Sometimes, confusion confines the applicants. They don’t get the idea of selecting the appropriate application form. So, they must carefully select the Form XIX which is enough for a family consisting of spouses and two minor children.

Its part A and B are filled online. Subsequently, its hard-copy must be submitted to the Indian Mission with the following documents.

Citizenship certificate
Proof of self/ grandparents/ great grandparent (property papers/birth certificate/residential proof of 1950 or before)
Passport
Copy of domicile certificate
Birth certificate/residential proofs attested by the first class Magistrate/ District Magistrate.
Marriage certificate of spouses (of Indian origin)

While submitting all these documents, the authority processes this request only in return of particular amount (which is INR 15,000 currently). However, this sum can be changed as per direction of the authority.

It’s advantageous!

It would be a happy moment when one travels across the country and no hassle obstructs. This exactly is the benefit which this card awards to its bearer. But this is not the only one. There are more advantages that can relief mavericks. Catch a few below:

Multi-purpose visa for life long.
No need to verify with police even though the stay exceed 180 days limit.
Parity with NRIs in respect to financial, economic, and educational benefits.
Parity with NRIs when it comes to adopting an Indian child.
Parity with NRIs in respect to tariffs for domestic flights.
Parity with NRIs when it comes to paying entry-fee for touring wild-life sanctuaries and national parks in India.
Parity with NRIs in respect to paying entry fee for visiting national monuments, heritage sites and museums in India.
Parity with NRIs when it comes to take admission in All India Pre-Medical Test or any such test.
Permitted to show an attested/notarized affidavit that specifies address (& email address) of the bearer in place of residential proof.

It is noteworthy that this card does not facilitate acquisition of agricultural or plantation land/property. Therefore, such persons cannot buy any farmhouse or farm/field in their own name.

Comparison between PIO and OCI card facilities

Apart from NRI status, there is a third facility also called PIO card. It expands as Person of Indian Origin. However, the Modi government has ceased accepting fresh application for seeking this card since 9^th January 2015. Yet, its old bearers are permitted to enjoy its all benefits.

In terms of benefits, both, cards are more or less equal. But still certain differences make them poles part. These differences reflect in:

Since the formerly mentioned card is no more issued, its holders are recommended to switch it with latter card. They can enquire for how PIO card holders can apply for OCI card at the nearest FRRO office. Although it is not mandatory yet the confusion spread when this bulletin surfaced. Today, it’s clear that the already registered PIOs card-holders can resume its use for traveling. They must carry their old as well as new passport along.

This news had surely burdened lots of worries on the prospective travelers. Now, the competent authority (FRRO) provides a registration booklet to PIO card-holders. They can get it attested on every visit from the consular office/passport authority. Forgetting passport can reject their entry. So, they must keep it along.

The conversion slaps an extra cost worth INR 8,000. The applicant has to visit the bank for withdrawing a Demand draft of the same amount.

How to Select School for NRI Children in India

September 30, 2016 Manoj Sodhani Comments 0 Comment

Non-Residents of India are pretty much impressed with the quality of education in India. Apart, it educates them about their customs, rituals and tradition. So, it is important for them to attend all information about the schooling in India.

First, they require enquiring about the syllabus. Choosing from CBSE, ICSE, IGCSE, IB and SSC will enable them pick the syllabus they want to learn. Day-boarding and boarding are the two kinds of schooling institutions prevalent in India. For the wards of Indian diaspora abroad, day-boarding is the best choice if they begin as a startup.

Education is segregated into four stages in India. Primary, middle, secondary and senior secondary determine these stages. Excellent education at school level is imparted by private ones. They charge high amount (in lakhs) as per their fee-structure. Some of them have provision to charge extra amount from the NRIs and OCIs. So, this community must check it before admitting children in the school.

What NRIs Should Do to Bank A/c after Resettling in India?

August 19, 2016 Manoj Sodhani Comments 0 Comment

Are NRIs permitted to hold their assets abroad?

Many questions echo in the core of Non Residents of India (NRIs). Some of the questions are-“If I would be able to hold my foreign assets? ; What will happen to my foreign accounts? ; Should I close them all?” and many more….

Emergence of such questions is natural. But the best part is that they are allowed to keep hold of their foreign assets, like foreign currency in banks. However, they must convert their NRE, NRO and FCNR accounts into resident saving account. It is mandatory because their foreign accounts will be closed after shifting to India.

But it does not imply that they don’t have right to keep their foreign currency. Rather, they can keep it safe in the converted resident saving account. But they must inform the banks (in which their accounts are) about the resettlement to India.

What options NRIs have to change their bank account when resettling in India?

As said above, it is a must to convert foreign bank account into resident. Emigrants have three options for saving their hard earned money, i.e. NRE, NRO and FCNR account. These are the best services for NRIs. So, what’s the appropriate options for their conversion, have a look:

For NRO account holders, resident saving account is an appropriate option.
For NRE and FCNR account holders, Resident Foreign Currency (RFC) account is the best alternate.

What are the types of Resident Foreign Currency (RFC) account?

It is categorized in to two groups for:

Shifting NRIs
Resident Indians

What will happen to NRIs fixed deposit with the foreign account, if any?

Fixed deposits ensure long time investment at handsome rate of interest. Emigrants are no exception to it. So, what will happen to it if they have invested in foreign account after shifting in India?

NRIs need not dissolve their fixed deposits (FDs) since keeping it until maturity is permitted.
As FD matures, its holder must convert NRE/ FCNR account to RFC account.
After the account conversion, the account holder’s status is checked. If he is applicable for Resident (and Resident Not Ordinarily Resident or RNOR), then he can have an extra dose of benefits. He needs not pay tax for another 2 years.

(Those who have spent continuous 9 years are categorized under RNOR status.)

What’s the best option for keeping foreign currency in India?

In India, Reserve Bank of India is the apex banking institution. According to its guidelines, the Indian residents can channelize their fund through foreign currency bank account. This account enables deposits in US dollars, EUR, GBP and Japanese Yen.

But an account holder is disallowed to deposit more than one currency in an account. If the need arises, the person can open another account. But he is unable to get any interest as it is not allowed.

Benefits of RFC account:

For transferring income earned from foreign sources
For depositing pension from foreign government/organization.
For transferring money from foreign country periodically.
No need to keep minimum balance
Fluctuating value of foreign currency does not cast any impact.

How NRIs Can Repatriate Pension to the US from India?

August 2, 2016 Manoj Sodhani Comments 0 Comment

Repatriation of Pension in the US

Repatriation of pension amount stands for returning the annuity. The US is hugely populated with Indian diaspora. India terms them as NRIs. Many of these have spent their life in government jobs. And later after retirement, they settled in the US with their children.

How easy is to repatriate it to the US?

In such cases, they are still eligible for withdrawing their pension amount. After all, it’s a part of their hard earned money that they receive at the time of retirement. So, how can they receive their pension in the US? Should they come down to India for carrying out formalities? Its answer is hidden in the below mentioned statement of RBI (The excerpt conveys the synonymous message of the RBI statement):

“RBI has declaimed that the NRIs/PIOs who don’t have their NRO account and non-taxable income in Indian need to pay no formality of submitting a Chartered Accountant’s certificate. This certificate is mandatory for remitting current income of those having taxable income in India. It includes dividend, rent, pension, interest and so on.”

Its statement has declared it as one of the most affordable NRI services. It further read an instruction for the authorized dealers that they can procure a simple declaration from the NRIs/PIOs. In it, they should declare that their income is grouped under non-taxable income. Hence, they are not the tax payer in India. The dealer can keep the declaration with them for the future reference from the Income Tax Authorities (if required).

How the present system of repatriation differs from the earlier one?

Earlier, RBI issued a notification to the bankers. The apex banking entity of India permitted repatriation of the current earnings in India. The current earning can be sourced through rent, dividend, pension, and interest. But now, it is not required.
The repatriate system also required a Chartered Accountant Certificate. It certified the exact source of the payee’s income. And also declared whether it was taxable or not. But now, it is also not mandatory. The migrants can present a declaration stating they belong to non-tax payer group.
Earlier, migrants necessarily required NRO account as a transferring channel. But now, it is not required.

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