How to check if you are an NRI, a RNOR, or an Ordinary Indian Resident for Income Tax?

One of the important question among Indians going abroad or NRIs returning from overseas to India for a good is to check their residential status to see whether they qualify as an NRI, an RNOR or an Ordinary Indian Resident in the current and future financial years. Why it is important to know the residential status? Well, it's quite important from income tax perspective because if you are an NRI or RNOR (Resident but not Ordinarily Resident) then you don't need to pay tax on your global income, which include interest earned on NRE fixed deposits and FCNR fixed deposit. Instead, you only have to pay tax on income earned in India.

Can NRIs send Indian currency to India through Fedex or DTDC Courier?

One of the most frequently asked question among NRI community post the historic announcement of demonetization of Rs 500 and Rs 1000 notes in India is whether NRIs can send the Indian currency to India using FedEx, DTDC or DHL express or not. The answer is No, NRIs cannot send money e.g. bank notes, currency notes, coins and traveler's cheques via international shipment e.g. DHL Express, DTDC, FedEx or any other means to India.

NRI Minimum Account Balance and Penalty charges - ICICI vs HDFC vs SBI vs Kotak

One of the important detail many NRIs ignore while opening NRE or NRO saving account is the minimum account balance required to be maintained on the monthly or quarterly basis. Sometimes this is also known as average monthly balance. On average you need to maintain at least 10,000 Indian Rupees as minimum monthly balance but it varies hugely from bank to bank and on different account type. Banks also charges the penalty if you don't maintain the required minimum balance in your NRE account, which not only completely offset any interest gain you have made but also put a dent on your principle amount. I have friends which have lost thousands of rupees as minimum balance penalty because of ignorance and not paying enough attention.

How to Open NRE or NRO account Online From Outside India? ICICI, HDFC, Kotak Mahindra Bank

Nowadays, opening an NRE or NRO account from overseas has become quite easy with an online application form and free pickup services offered by many Indian public sectors and private sector banks. Almost all major banks including public sector banks likes SBI, Bank of Baroda, Union bank of India, Federal Bank and private sector banks like ICICI, HDFC, Axis Bank, Kotak Mahindra Bank, and foreign banks operating in India like DBS, Standard Chartered, and Deutsche bank all allows you to fill the account opening form online and many of  them have free pickup service or local PO box services to collect the completed application form and necessary documents.

7 Points to Remember while Buying Health Insurance for Parents or Elderly People?

In the last couple of articles, I have told you why health insurance is important for parents and what are the tax benefits you get by buying health insurance for your family and parents (see here), but I have not shared any tips about buying the right health insurance. In this article, I am going to fill that gap. If you are buying health insurance policy for your parents e.g. your month or father, you should consider following 7 points before finalizing any health insurance policy.

5 Tax Saving Schemes not available to NRIs

If you have been filing your income tax returns in India then you know that there are a lot of tax saving options you can use to claim tax deductions and exemptions under a various section of income tax law of India. For example, section 80C allows both resident and non-resident taxpayer of a deduction up to 1.5 lacs from their gross taxable income. This can substantially reduce your tax liability by bringing down your total taxable income into lower income tax slab rates. Unfortunately, not all tax saving schemes available to the resident taxpayer are available to NRI like there are almost 13 ways to save tax under section 80C, which I know, there are more but many of them are not available to NRI taxpayers. In this article, I'll let you know the difference in tax deductions and exemptions applicable to NRI and resident taxpayer.

How to reduce TDS on NRO Fixed Deposit using DTAA?

In last article, I told you that you can use the DTAA (Double Tax avoidance Agreement) to prevent double taxation of same income in two countries. Since most of the NRI pay their taxes in their country of employment or resident, they can also take advantage of DTAA to reduce TDS on NRO fixed deposits held in India, both private and public sector banks. Since banks are suppose to withhold tax of 30% plus applicable surcharge and cess in terms of the provisions of section 195 of the Income-tax Act, you end up paying very high TDS up-to 30.9% on NRO fixed deposit, which is enough to wipe out 1/3rd of your interest.

Section 80TTA Tax Benefits - NRI can claim 10,000 INR On interest of Saving Account

Do you know that Non-resident Indians can claim a deduction on income from interest on saving bank accounts up to a maximum of 10,000 INR like resident Indians? Well, I didn't. I just come to know about this relatively new tax deduction method. This benefit is provided under Section 80TTA, which is available from the financial year 2012-13. Since an NRI can only have either NRE or NRO saving account, and given interest earned on NRE account is exempted from tax (see here), this will only applicable to interest earned on an NRO saving account.

US NRIs and H1B holder must submit FATCA Compliance Certificates to Indian Banks

Recently one of my friend, working for an IT company in the USA on H1B visa received notification from Indian banks and Mutual funds that he needs to submit FATCA compliant certificates. He wasn't sure about what is FATCA and why he needs to submit FATCA certificate to Indian banks. This inspired me to write this short post explaining what is FATCA and who needs to submit FATCA certificates in India.

Rajiv Gandhi Equity Savings Scheme Tax Benefits

Since the last date of the financial year 31st, March is approaching, many Mutual funds, brokerage house, and Insurance companies are aggressively promoting their products in a bid to attract income taxpayers who like to save tax. Particularly, Mutual funds and brokers like ICICI Direct are trying to improve their tax saving options, like ELSS, Infra bonds, etc. Recently I receive an email from ICICI direct regarding one of the lesser used tax saving option, Rajiv Gandhi Equity Saving Scheme (RGESS),  which inspired me to write this post.

What happens to NRE Saving Accounts and Fixed Deposits after returning to India?

Many Indians who goes to work abroad for work opens NRE saving and NRE fixed deposit account to take benefit of higher interest rate and absolutely no tax on interest earned on those account, but do you know what happens to your NRE account after you return to India? If you are only coming to India for short term, you can still keep your NRE account but if you are coming India to take employment or for opening business you need to inform your bank about change in your NRI status and they will convert your NRE saving account into Resident account. In case of NRE fixed deposits, you will continue to earn interest at original rate until maturity or pre-closure, once tenure is over you will get the money. This will be tax free as there is no tax on NRE fixed deposits in India.

Employee Provident Fund (EPF) is not Tax free Anymore, 60% of EPF Withdrawals will be Taxed as Income

One of the most important and controversial points of the recently concluded Indian budget 2016 is the taxation on Employee Provident Fund withdrawals. Earlier, similar to PPF, EPF was also completely tax-free, i.e., whatever amount you invest in EPF, up to 1.5 lakh under section 80C, was deducted from your taxable income. There was no tax on gains made by EPF, and the maturity amount was also exempted from tax, but not anymore.