TAX RETURN (India)
Our team of highly skilled and motivated professionals includes Chartered Accountants and Company Secretaries. Over the years, we have gained in-depth experience in providing multitude of services, ranging from tax planning to a representative office. Our professional approach blended with personal touch has earned us enormous confidence of all our clients, which is reflected in an enduring business relationship that we enjoy with them as also in the consistent growth in portfolio of our services. We assign the most appropriately skilled and specialized professionals to meet all the assignment specific requirements.
SERVICES TO NON RESIDENT INDIANS
Complete range of services are offered to Non Resident Indians and Foreign Citizens. We assist Non Resident Indians in preparation of their tax returns, managing their investment portfolios, getting clearances from Reserve Bank of India and compliance with statutory authorities. Our services includes:
* Tax Advisory Services
* Investment Advisory
* Manage and maintain your accounts in India-you can be updated on daily basis.
* Preparing and filing your income tax return
* Compliance with Reserve Bank of India Rules and Regulations
* Other customized solutions
We offer a complete range of service from the simple task of depositing interest/dividend warrants to preparing accounts, filing tax return and obtaining permission/clearances, advice on investments and portfolio advisory services. All this is done by keeping our clients well informed on a daily basis through the internet. In short, our clients are in control of their activities in India without having to be here. Our clients receive statements, reports, accounts and any other information on daily basis.
INVESTMENT IN INDIA
We assist foreign companies to setup businesses in India by not only advising them about the foreign investment policy & procedures of the Government of india but also obtain all necessary approvals etc.The services rendered in this area include the following:
* Identifying investment opportunities and businesses/projects
* Company formation including all other registrations like income tax, etc.
* Assistance in all agreements and contracts
* Obtaining all approvals and clearances from Reserve Bank of India, Foreign Investment Promotion Board (FIPB) & other Government Departments.
* Setting up the organization structure specially with respect to accounting systems etc.
We provide valuable inputs on the most tax friendly options while conceptualizing the business/investment strategy. We also provide our expert advice on all other investment opportunities in India like investment in real estate, capital markets etc.
TAX EXEMPTIONS FROM INCOME TAX
Income from the following investments made by NRIs/PIOs out of convertible foreign exchange is totally exempt from tax:
(a) Deposits in under mentioned bank accounts
(i) Non Resident External Rupee Account (NRE)
(ii) Foreign Currency Non-resident Account (FCNR)
(b) Units of Unit Trust of India and specified mutual funds, other specific securities, bonds and savings certificates (subject to conditions prescribed under the Income-tax laws and regulations).
(C) Dividend declared by Indian company.
(d) Long term capital gains arising from transfer of equity shares in a company and/or equity oriented schemes of Mutual Funds, which are subject to securities transaction tax.
It should be noted that the tax exemptions relating to NRE bank deposits will cease immediately upon the NRI/PIO becoming a resident in India whereas the interest on FCNR bank deposits will continue to be tax free as long as the NRI maintains the status of Resident but Not Ordinarily Resident or until maturity, whichever is earlier.
TAX EXEMPTIONS FROM WEALTH TAX
Where an NRI/PIO returns to India for permanent residence, the money and the value of assets brought by him into India and the value of assets acquired by him out of such money within one year immediately preceding the date of his return and at any time thereafter are totally exempt from wealth tax for a period of seven years after return to India.
The above exemption may not have much relevance now since the Finance Act 1992 has considerably reduced the scope of wealth tax. With effect from 1st April, 1993, wealth tax is being levied only on non-productive assets like urban land, buildings (except one house property), jewellery, bullion, vehicles, cash over Rs.50,000/- etc. The current rate of wealth-tax is 1 % on the aggregate market value of chargeable assets as on 31st March every year in excess of Rs.1.5 million.
However, it may be noted that NRls are also liable to pay wealth tax if the market value of taxable assets as on 31st March exceeds Rs l.5 million.
TAX EXEMPTIONS FROM GIFT TAX
Gift Tax Act, 1958 has been repealed with effect from 1st October, 1998 and as such, Gift Tax is not chargeable on any gifts made on or after that date.
With regard to gifts of foreign exchange or specified assets made by NRls to their relatives in India, it should be noted that
1. Gifts made by an NRI/PIO to his or her spouse, minor children or son's wife will involve clubbing of income and wealth in the hands of the donor-NRI/ PIO.
2. In the case of gifts to minor children the clubbing of income, as above, will cease upon such children attaining the age of 18 years.
3. The clubbing provisions will apply, in case of gift to spouse or son's wife in India, only to the first-stage of income from the original gift.
Second-stage income arising from investment of the income from the original gift is not clubbed and this will constitute the separate wealth/income of the donee- spouse.
Generally, the income of minor children, from any source (including income from gifts from parents) is clubbed with the income of the parent whose total chargeable income is greater.
Other matters to be noted regarding gifts are:
1. All gifts received by residents from NRls/PlOs may be subject to the tax authorities requiring the recipient to provide evidence as regards the identity and financial capacity of the donor and genuineness of the gift.
2. Under the Foreign Exchange Management Act, 1999 no approval from Reserve Bank of India (RBI) is necessary for the resident donee to hold gifted immovable property outside India provided the said property is gifted by a person resident outside India. General permission, subject to certain conditions, is granted by RBI for the resident donees to hold foreign moveable properties such as shares and securities gifted by NRI/PIO donors.
3. The Income Tax Act has now provided that any sum of money exceeding Rs.25, 000 received without consideration (i.e., gift) by an individual from any person on or after 1st September, 2004, the whole of such sum will be chargeable to income-tax in the assessment of recipient (i.e., donee) under that head "Income from other sources" for and from assessment year 2005-06 and onwards.
However, the above provisions will not apply to any sum of money (gift) received
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or © under a will or by way of inheritance; or
(d) in contemplation of death of the payer.
The term "Relative" is defined as:
(1) spouse of the individual;
(2) brother or sister of the individual;
(3) brother or sister of the spouse of the individual;
(4) brother or sister of either of the parents of the individual;
(5) any lineal ascendant or descendant of the individual;
(6) any lineal ascendant or descendant of the spouse of the individual; and
(7) spouse of the person referred to in (2) to (6).
Scope of Receipts
* As per plain reading of the provision, any receipt without consideration, save exclusions, whether capital or otherwise, may be considered as income.
* Similar receipts by any person (such as a partnership firm, a company, and Association of Persons AOP etc.), other than an individual or a Hindu undivided Family, would not constitute income in its hands.
* The provision would apply to an individual irrespective of his residential status. Accordingly, any receipt in India by a non-resident of the nature discussed above would be considered as income in his hands.
* Gifts on occasion other than marriage, for example, birthday, marriage anniversary and other social occasions, religious ceremonies etc., would be taxable as income. Gifts received on the occasion of the marriage of the individual, irrespective of any limit, (but within reasonable limits) would not constitute income.
* The receipts should be in the form of money. Accordingly, any gift in kind would not be taxable. The receipts must be without consideration, implying in the nature of gift.