created by Rajesh Dhruva

Planning for Returning NRI


Returning NRIs Planning Package


Even after returning to India for permanent settlement, NRIs continue to enjoy many investment incentives under the Foreign Exchange Management Act,1999 [FEMA] and tax concessions under the Income-tax Act,1961.[I.T. Act]

Although, technically "Residents", how-so-ever FEMA treats returnee NRIs almost at par with NRIs as regards their foreign currency accounts in India and assets abroad. Under the I.T. Act also, most cases being "Not Ordinarily Resident", returnee NRIs continue to enjoy tax exemptions and tax concessions almost at par with NRIs for 2 to 3 years. They also enjoy the benefits of Dual Tax Treaty, where applicable.

We, at offer a composite planning package for returning NRIs.

Under the package, we provide the applicability of various provisions under Foreign Exchange Management Act, 1999 , Income Tax Act, 1961 and basic applicability of provisions of Double Tax Treaty, in greater details which would cover provisions relating to :

1. Residential Status :
.01 Residential status under Income Tax Act, 1961.
.02 Residential status under Foreign Exchange Management Act, 1999.
.03 Basics of residential status under Double Tax Treaties.

 2. Bank accounts in India :
.01 Continuation or otherwise of Non-Resident External (NRE) accounts in India.
.02 Continuation or otherwise of Foreign Currency Non Resident (FCNR) deposits in India.
.03 Provisions relating to Resident Foreign Currency (RFC) accounts in India.
.04 Status of NRO account in India. 

3. Tax liability in India :
 01. Income-tax on interest income from NRE accounts.
.02  Income-tax on interest income from FCNR  deposits.
.03  Income-tax on interest income from RFC account.
.04 Taxability of other income like interest, pension, rent etc. in India after the date of return.
.05 Taxability of global income like interest, rent, pensions, dividends and capital gains.

4. Assets outside India under FEMA : 
.01 Continuation of holding of immovable properties outside India.
.02 Continuation of movable assets like bank accounts, shares and securities, etc. outside India.

5. Tax liability of Income from Assets outside India :

.01 Taxation of overseas income, remitted to India or retained abroad.
.02 Tax liability as regards overseas income vis-a-vis benefits under the dual tax-treaty, if applicable.

Said topics are explained in details and are supported by copy of relevant Section or Regulation of the Act.