NRI Investment in India and R2I Financial Concerns

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Bade
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Postby Bade » 15 Mar 2006 01:33

As an NRI if one rents out residential property in India my understanding is that the income has to go into an NRO account. How about the taxes on this income. How does it get reported.

My NRE a/c sends me the yearly 1099 statement. Is it the same for NRO too? Do I owe any taxes in India from the NRO or is it also tax-exempt like the NRE a/c ?

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Postby Dileep » 15 Mar 2006 03:01

Bade wrote:As an NRI if one rents out residential property in India my understanding is that the income has to go into an NRO account. How about the taxes on this income. How does it get reported.

My NRE a/c sends me the yearly 1099 statement. Is it the same for NRO too? Do I owe any taxes in India from the NRO or is it also tax-exempt like the NRE a/c ?


You owe taxes on the interest on NRO AC in India. The bank will TDS and send you a form-16 of Indian IT Dept. I don't know if they will send you 1099.

You also owe tax on that income in the USA. That is right, the NRO income is double taxed, both by unkil and mom. However, the tax paid in India can be refunded, based on the total taxable income. You will have to file return in India and do the burocrazy for that.

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Postby Bade » 15 Mar 2006 23:03

Thanks Dileep for the answer.

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Postby connan » 28 Mar 2006 10:23

Questions to Guru's? (Hope this is the right place).

I work for a manufacturing company in the US and am planning to move to India to setup a R&D center followed by manufacturing and sales operations. I want to know what are the tax implications for returning NRIs.

I am able to draw my salary both in US and India if that helps. I am in the process of hiring lawyers and CA's in India, but would like to be prepared. I would appreciate it if any one can point me to a good site. I have searched a lot on the internet but lot of information and no clear answers.

Thanks in advance!

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Postby Dileep » 30 Mar 2006 01:43

connan wrote:Questions to Guru's? (Hope this is the right place).

I work for a manufacturing company in the US and am planning to move to India to setup a R&D center followed by manufacturing and sales operations. I want to know what are the tax implications for returning NRIs.

I am able to draw my salary both in US and India if that helps. I am in the process of hiring lawyers and CA's in India, but would like to be prepared. I would appreciate it if any one can point me to a good site. I have searched a lot on the internet but lot of information and no clear answers.

Thanks in advance!


If you are a US citizen, your worldwide income is taxed in USA. On the other hand, India taxes only Indian income. So, if you are a US citizen, it would be better to get paid in USA, because that income is taxed only once.

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Postby Kakkaji » 30 Mar 2006 02:25

Dileep wrote:
connan wrote:Questions to Guru's? (Hope this is the right place).

I work for a manufacturing company in the US and am planning to move to India to setup a R&D center followed by manufacturing and sales operations. I want to know what are the tax implications for returning NRIs.

I am able to draw my salary both in US and India if that helps. I am in the process of hiring lawyers and CA's in India, but would like to be prepared. I would appreciate it if any one can point me to a good site. I have searched a lot on the internet but lot of information and no clear answers.

Thanks in advance!


If you are a US citizen, your worldwide income is taxed in USA. On the other hand, India taxes only Indian income. So, if you are a US citizen, it would be better to get paid in USA, because that income is taxed only once.


But he can exclude upto $80,000 of Foreign Earned Income from U.S. Income Taxes.

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Postby yogindra » 24 Apr 2006 01:25

Deleted
Last edited by yogindra on 26 Apr 2006 00:48, edited 1 time in total.

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Postby Dileep » 24 Apr 2006 08:49

RajeevT wrote:But he can exclude upto $80,000 of Foreign Earned Income from U.S. Income Taxes.


The FEIC is applicable for payment for work (salary wages etc). Not for investment income we are discussing here. The investment income have no credit scheme as far as I could gather from the IRS site. The FEIC isessentially for US ppl live abroad.

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Postby asharma » 08 May 2006 14:17

Bhailog, a favour- would anyone be able to point me to a reliable CPA in the Boston area pls?

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Postby shyamd » 10 Aug 2006 15:46

GCC expats remit $5 bn annually in India
http://www.dnaindia.com/report.asp?NewsID=1046273

DUBAI: Over four million expatriate Indians staying in the Gulf Cooperation Council states send home a staggering $5 billion annually as remittances, according to a study.

According to it, foreign workers send a total $27 billion annually, which is almost equal to nine per cent of GCC states' GDP each year.

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Postby svinayak » 07 Sep 2006 10:43

India's ranking among emerging equity markets has seen a significant
improvement over the past month, following the renewed upswing in stock
prices since July 21. The country is now the third best performer in
Asia and the eighth best in the world, based on the Morgan Stanley Capital
International (MSCI) indices, which track 27 emerging markets globally.

A portfolio of Indian shares modelled on the MSCI India index has
delivered 20.2% dollar-denominated returns since the beginning of 2006. In
rupee terms, the returns are higher at 24.2% due to devaluation of the
currency against the dollar.

A month ago, India was the fourth best performer in Asia, behind China,
Indonesia and the Philippines, and the twelfth best overall. In Asia,
India continues to trail China and Indonesia, but has overtaken the
Philippines.

The country's latest ranking is close to the level in May, when Indian
equities were at their peak. India, then, was the third best market in
Asia and the seventh best overall. Indonesia retains the top spot in
Asia with 36% returns, followed by China with 28%. From a month-on-month
perspective, India has been the fastest mover in Asia.

Overall, Morocco is now the best performing emerging market with 53.71%
returns year-to-date, while Venezuela has slipped to the second spot
with 51.21% returns. Among the markets ranked above India in the MSCI
emerging market pecking order, Morocco is the only one to have performed
better than India over the past month.

The strong performance by Indian equities is fuelled by a fresh surge
in FII inflows, along with easing concerns over rising interest rates
across the globe and crude oil prices.In August alone, FIIs pumped in Rs
4,426 crore into Indian equities at the net level, the highest in a
single month since March, when they had pumped in Rs 6,532 crore. Interest
in emerging markets - BRIC countries in particular - has risen sharply
over the past month.

Funds investing in the shares of emerging markets drew a combined $875
million on a net basis for the week ended August 23, according to
Emerging Market Portfolio Research, a firm that tracks fund flows into
emerging markets. Of this, 26% were routed into funds investing in the BRIC
region. Overall, the inflows were the highest since the week ended July
12, when emerging market funds had attracted $1.05 billion.

According to a recent strategy note by brokerage house Enam Securities,
unless oil and interest rates rise significantly, there no serious
danger to the India story. It has also said a slowdown in the US economy is
likely to impact other emerging markets far more than India.

"The direct Indian effect (of a slowdown in the US) is only on interest
rate differential and risk appetite (towards equities), but not as much
on GDP growth as for other EMs (emerging markets)," the Enam note said.

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Postby svinayak » 08 Oct 2006 00:30

Why the Malhotras are heading towards bankruptcy
Did you think that having ample money is an assurance of a good, prosperous life? Read on and discover how you would feel in the shoes of Mr. & Mrs. Malhotra.


Did you think that having ample money is an assurance of a good, prosperous life? Mr and Mrs Malhotra family (name changed) live in an upmarket housing society in South Mumbai. Most people would see them to be truly blessed, prosperous and would want to be in their situation. Read on and discover how you would feel in the shoes of Mr. and Mrs. Malhotra.



Here is an insight in their current life:

* Current net worth – Rs. 11 crores. (This includes residence at Peddar road of Mumbai – Rs 2 crores, farm house –Rs 1 crore, RBI Bond Investment –Rs 1 crores, jewellery & diamonds – Rs 75 lakhs, PMS (Portfolio Management System) schemes –Rs 25 lakhs, their share in family’s commercial properties in Aurangabad, Delhi & Ahmedabad valued at Rs 4 crores, their share in family’s business premises in Mumbai valued at Rs 2 crores)
* Loans and liabilities – Negligible, some car loans
* Have half a dozen gold & platinum credit cards
* Have premium relationships with all companies – Private banking, premier banking, priority circle etc.
* Sought after for business by all relationship managers of all companies
* 2 children – both studying in USA at Wharton
* Generally, a 5-star lifestyle

Here is some more insight in their current life:

* Ongoing business income – practically nil due to business & stock market losses in 2000-01
* Investment income – Rs. 6 lakhs per annum from Rs 1 crore invested in 6% RBI Bonds
* Expenses – Rs. 9 lakhs per annum approximately – deficit of Rs 3 lakhs and gap widening each year with inflation.
* Commercial properties are all under double dispute i.e. amongst siblings and with encroachers – Assets cannot be used as they are part of family trust and trust was formed by Mr. Malhotra’s late father – who died in 1996 without a Will. Assets can be seen but can’t be used or touched till disputes are resolved. As a result, business premises in Mumbai also under family squabbles since last 8 years.
* Children’s fees at Wharton partly paid – no more liquid money available for fees.
* Now they are considering taking a loan for a number of things – which in my opinion is a very bad idea given their situation.

Their situation is so critical that it is hard to imagine that someone who is worth Rs 11 crores today has problem in funding their children’s education, children have to work and earn their fees, parents i.e. Mr. & Mrs. Malhotra are under depression, can’t afford to think about holidays, feel strangulated to maintain their lifestyle. If you think that they can cut their expenses it is not possible. That’s because they come from a section of society where either they continue to be part of that society or get totally cut off. I am not being sarcastic here but granting them their lifestyle requirements, given our societal thinking and background. Everyone else in their community is okay but for them. Social relations and obligation force them to have a lifestyle – they have to have a good car – can’t do with a Maruti esteem, they have to go to parties, they have to entertain guests now and then, they have to have help at home, have to pay society dues; and living in upmarket South Mumbai apartments anyway can cost you Rs. 50000 to a lakh per month, comfortably. (Rainy day cash: click here to know how much to save and where to stash)



Things are only going to get worse - both Mr. and Mrs. Malhotra are now looking for jobs and at their age of around 50; and with little or no corporate experience things are difficult. They have been business owners forever.



Why did this happen and how to come out of a situation like this:

The Malhotra family suffers from paranoia of ‘safety’. Late Mr. Malhotra was overbought in real estate with no proper plans to manage real estate. Now, there is encroachment on their land. Moreover, given legal expenses and absence of father’s will, how and who will bear all expenses - legal and otherwise is a question. Our Mr. Malhotra has hardly got anything to pay but some of his siblings do and because they will fund all expenses – they want a larger share of the estate, which is naturally not acceptable to the other siblings who are not as wealthy. Even in Mr. Malhotra’s case, he has majority of his investments in RBI Bonds from which he is earning peanuts in terms of 6% given this lifestyle and expenses.



His PMS is doing just ok, but his brokers are happily churning his portfolio five-eight times a year and earning handsome brokerage. Mr. Malhotra, given his risk profile earns about 6-10% on his PMS post taxes, brokerage and accountant’s charges. Each year, he is cutting slices from his PMS to fund his life and is worried as the PMS he started with Rs. 50 lacs is now down to half given his slice cutting each year for the last 4 years. Mr. Malhotra is really stuck. Even if he takes a loan against RBI Bonds – from where will he pay interest on the loan? So much for the so-called ‘safety’ and this ‘safety’ at what cost? Rather have the knowledge to understand what is safe and what is not. What is the point in such type of safety if he does not have enough to eat?



Now we may not see many with a Malhotra type family situation but we surely see many with a ‘financial management’ situation that is really similar to the Malhotra’s. Large assets and tiny earnings.



The solution is not easy. He is in desperate need of liquid cash and must consider some hard decisions – selling properties, consider unfavourable offers from siblings to surrender his share, restructuring his portfolio, analysing new income sources etc to name a few. Even after the cash is generated it will have to be invested using variety of asset allocation models based on various goals and monitored closely. This is to provide him some cash support and first bridge the impending gap of inflation on expenses and thereafter look at creating some surplus.



Given the current situation – Mr. Malhotra is speeding towards a black hole of financial management - Bankruptcy.



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Postby Dileep » 08 Oct 2006 02:05

The past year, his 25L PMS should have grown to at least 35L. If it didn't, it is high time to fire his broker.

The story is fictional, and not so well written either.

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Postby Tilak » 23 Nov 2006 18:45

NRI donates Rs100m to varsity
From our correspondent
23 November 2006

HYDERABAD — A former student of the Andhra University, now working in the United States has made a donation of Rs100 million to his alma mater for developing a new institution.

T.K. Paul, who passed his B. Pharma and M. Pharma from the Andhra University about 33 years ago, made the donation for construction of a new building for the College of Pharmaceutical Sciences by the university.

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Postby Alok_N » 24 Nov 2006 02:06

Dileep wrote:The past year, his 25L PMS should have grown to at least 35L. If it didn't, it is high time to fire his broker.

The story is fictional, and not so well written either.


they are supporting TWO kids at Wharton and their annual expense is Rs. 9 lakhs onlee? ... :shock:

Rs 9 lakhs won't even support ONE kid at Wharton ... forget about their "5 star lifestyle" ... :lol:

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Postby Singha » 24 Nov 2006 07:46

given his risk profile earns about 6-10% on his PMS post taxes

thats pretty ridiculous figure. A monkey throwing darts on the wall would have pulled in 30% pa since 2002. its hard to find any large equity MF that has not done that. the brokers must of the gordon gecko type.

Property investment in India is not at all the safe, transparent and legal instruments they are in developed nations. Cases of fraud, unclear titles and multiple registrations are too common. the registration offices are hellholes of paper files and corruption. every applicant has to pay 5-10k to register his own property not get anything from them. and once siblings and joint families come into picture its more messy.

I would advise NRIs to own their property alone not get into messy joint ownerships / plays with cousins brothers etc which will just spoil relationships down the line. maybe not while you are alive but later.
and a clear will seems like a must these days , though I hear even that
doesnt guarantee a hassle free existence....one has to "probate" the will
which => more chakkar katna of courts and bribery.

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Postby Alok_N » 24 Nov 2006 08:08

Singha wrote:
I would advise NRIs to own their property alone not get into messy joint ownerships / plays with cousins brothers etc which will just spoil relationships down the line. maybe not while you are alive but later.
and a clear will seems like a must these days ...



that is good advice ... however, there are other situations ... I own my property in Delhi in joint ownership with my brother ... I plan to retire there ... if I die before I can retire, he is welcome to have it because the rest of my family has no intention of living in India ... Smile

this avoids any need for a will with respect to assets in India ... I urge all NRI's to do it ... this is the best way to gift to your family in India part of the riches you earn in MassaLand ...
Last edited by Alok_N on 24 Nov 2006 11:05, edited 2 times in total.

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Postby ShauryaT » 24 Nov 2006 10:22

I have found a much better way to "own" property in India. It is called REIT. Stands for Real Estate Investment Trusts. They are essentially like mutual funds/PMS devoted to investment in real estate. It has been introduced in India over the past one year or so and is now offferred by many institutitions of repute.

It is for folks, who want to invest in the real estate market in India but do not want the management hassles of owning property. You get units just like in a mutual fund. But this is an investment vehicle and not for owning property directly.

Ask one of your financial advisors in India for this investment vehicle. It is also an excellent way to diversify from the securities markets.

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Postby Alok_N » 24 Nov 2006 10:56

ShauryaT wrote:I have found a much better way to "own" property in India.


yes it is much "better" in quotes just like it is "own" in quotes ...

it is just another investment ... why confuse it with "owning" property? ... owning property is for folks who want to eventually live in that property ...

It is for folks, who want to invest in the real estate market in India but do not want the management hassles of owning property.


management is no hassle ... there are dozens of outfits available who will manage your property for reasonable commissions ...

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Postby Alok_N » 24 Nov 2006 11:06

Alok_N wrote: I urge all NRI's to do it ... this is the best way to gift to your family in India part of the riches you earn in MassaLand ...


I should add that you can finance a property in India off of a home equity loan on your property in the US ... hence, the interest on your property in India will be tax deductible ...

moreover, once you die, your relative is India will just take possession of that property without any tax implications, because it was in his/her joint ownership to begin with ... no will, no tax, no nothing ...

its a double win-win if I may say so myself ... and me a physics dork came up with it all by my lowly self ... 8)

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Postby vera_k » 24 Nov 2006 13:09

Only the interest paid on the first $100,000 of a home equity loan is deductible.

OTOH, you can deduct interest paid on two first mortgages at a time. Depending on your circumstances, it might be better to originate a second first mortgage for the purposes of owning property in India, as long as you don't run foul of the AMT due to the increased mortgage interest deduction.

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Postby Alok_N » 24 Nov 2006 13:44

vera_k wrote:Only the interest paid on the first $100,000 of a home equity loan is deductible.

OTOH, you can deduct interest paid on two first mortgages at a time. Depending on your circumstances, it might be better to originate a second first mortgage for the purposes of owning property in India, as long as you don't run foul of the AMT due to the increased mortgage interest deduction.


$100K is 45 lakhs in India ... not sure about it today, but a few years ago, that could buy you a fairly decent property ...

I am invested in a condo ... my reasons are that the condos have good security ... it is in fact a very good investment ...

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Postby vera_k » 24 Nov 2006 13:56

There's another aspect. The ability to afford a home that's a few hundred thousand above the median price often provides you the ability to live in a good school system...in that case you may not have the home equity to spare. This is when I discovered the magic of using another first mortgage to gain additional leverage.

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Postby Singha » 24 Nov 2006 13:57

it will get a 2BHK in good complex in gurgaon or blore today but not more.
prices are north of 3K/sqft surging to 3.5 in good builders, locales and ofcourse whether its "pool facing" and upper floor.

going by the beeline for pool facing you'd think half the male population intends to use binoculars and 'survey' the collection of wives splashing around.

p.s. I took outside facing, being of good moral fiber :oops:

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Postby ShauryaT » 24 Nov 2006 18:29

Alok_N wrote:
ShauryaT wrote:I have found a much better way to "own" property in India.


yes it is much "better" in quotes just like it is "own" in quotes ...

it is just another investment ... why confuse it with "owning" property? ... owning property is for folks who want to eventually live in that property ...

It is for folks, who want to invest in the real estate market in India but do not want the management hassles of owning property.


management is no hassle ... there are dozens of outfits available who will manage your property for reasonable commissions ...
Alok, Why confuse "owning" property for purpose of living in that property, it can be for investment too and there are many NRI's who do want to invest in property in India.

All I am saying is the entire process of property investment and the management of the process is riddled with pitfalls for the investor and REIT is a very sensible way to manage such risks.

REIT is just another investment but new for India. It is a very successful model to invest in property as evidenced in the US, which is now available in India.

Many NRI's have made the mistake of owning some land/apartments and then get mired in the screwed up process or the downright crooks in the system. Many buy such a property with the aim of buying it cheaper than what it would be 10-20 years from their investment date. Many things have gone wrong in this interimn period. REIT is in a sense just another investment vehicle but for the average investor a very important way to diversify the investment risks and manage the pitfalls of property investment in India.

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Postby Suraj » 05 Dec 2006 01:51

Important subject for US soc sec contributors who do not reside long enough to receive the benefits of the taxes they pay - typical for IT folks:
India, US move closer on social security pact
[quote]Indians working in the US have to mandatorily contribute to social security benefits but are unable to repatriate the same when they leave the US, in the absence of a totalisation agreement between the two countries.

The issue was discussed at a meeting of US Under Secretary for International Trade Franklin Lavin and Commerce Secretary G K Pillai in the capital. Commerce ministry officials said the Indian side pointed out that New Delhi had signed totalisation agreements with countries like Belgium and France, which had not set any pre-conditions.

“It was pointed out that India, which is a developing country, effectively gives a grant of $500 million to the US in the absence of a totalisation agreement. The US has indicated that it will soon have a video conferencing on the matter with senior Indian officials,â€

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Postby pradeepe » 05 Dec 2006 02:44

Singha wrote:going by the beeline for pool facing you'd think half the male population intends to use binoculars and 'survey' the collection of wives splashing around.

p.s. I took outside facing, being of good moral fiber :oops:


Me too have that kind of fiber :). I went for an outside facing one.
Of course all the pool facing ones being gone a long time ago had nothing to do with it.

Another question for the gurus. Why are the load costs for MFs in India so high. I have seen a few ICICI ones, and they were horrible.

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Postby Rye » 05 Dec 2006 02:54

Singha wrote:
Property investment in India is not at all the safe, transparent and legal instruments they are in developed nations. Cases of fraud, unclear titles and multiple registrations are too common. the registration offices are hellholes of paper files and corruption.


While chatting with a corrupt babu in Blore, I got the nugget that these corrupt govt. officials in charge of registrations and land records actually go through all the obituaries daily and cross-match the names with any matching land records, and then merrily go ahead and "sell" this land to a second person and provide them with bogus land records...this is a certainty if the land owner was an NRI or someone who is not likely to visit the property any time soon.


The real owner of the plot gets a nasty surprise down the line when he finds that somebody else has not only built a house, but has settled in....end of story for all practical purposes given that civil cases never see the light of day given the backlog.

What are the chances that these corrupt incompetents in the GoI/State govts. will rise to the challenge of land reform in India?

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Postby ShauryaT » 05 Dec 2006 08:07

pradeepe wrote:Why are the load costs for MFs in India so high. I have seen a few ICICI ones, and they were horrible.


My guess is primarily becuase Indian MF holders are not yet long term enough, so the fund wants to ensure that they get their dough. Many funds pro rate this, meaning the longer the term of the investment the lower the fees.

Something like a S&P Crawler or a Vanguard Index fund type of fees is not there in India, yet. But the MF industry in India is still relatively young, these things will come. With over a 1000 MF's - competition will ensure better services for the 'common' investor.

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Postby Dileep » 15 Dec 2006 23:05

I am quite interested in the tax issues ... so far I have not reported any Indian taxes to uncle sam ... am I in trouble?

Is it against the law? Sure! Are you in trouble? Maybe not. IRS wouldn't care about a few thousands of doolars you owe.

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Postby pradeepe » 16 Dec 2006 00:59

My guess is primarily becuase Indian MF holders are not yet long term enough, so the fund wants to ensure that they get their dough. Many funds pro rate this, meaning the longer the term of the investment the lower the fees.


Thanks. Didnt really see prorating in the load though. There was a prorated exit cost for getting out (zeroes out after 3 yrs).

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Postby Alok_N » 16 Dec 2006 02:18

Dileep wrote:You owe taxes on the interest on NRO AC in India. The bank will TDS and send you a form-16 of Indian IT Dept. I don't know if they will send you 1099.


My bank (IDBI) has never sent me anything of the sort ... but then that piece of crap "bank" is consistent ... it doesn't even send me statements ... my dad has to send Chotu to collect a print-out which he mails to me ...

what I have never understood is how come Chotu can collect a print-out without any authorization from me? ... :shock: ... while, me, the owner of the account can't get a statement mailed to me despite several requests ...

on top of that, their piece of crap "online system" locked me out because of some password problem and they won't reset my password either ...

of course, Chotu needs no password either ... :lol: ... (Chotu is known by face as my dad's man and he is "chalta hai" while I am some faceless account holder) ...

I have wanted to change banks, but the whole routine with forms, photographs, passports, first-born sacrifice, etc that is required to open an account is not worth it ...

You also owe tax on that income in the USA. That is right, the NRO income is double taxed, both by unkil and mom. However, the tax paid in India can be refunded, based on the total taxable income. You will have to file return in India and do the burocrazy for that.


no harm, no foul, eh? ... they have taken TDS and they are welcome to keep it ... :)

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Postby Dileep » 16 Dec 2006 02:59

I have good experience with ICICI and HDFC. Online works good, and they send paper statement to my address here.

Indian banks do not send 1099. They don't need SSN either. citibank OTOH takes SSN and sends 1099 for the NRI accounts. So, you have to calculate the interest by hand, convert it to dollars and report it. If you do capital stuff, you have to report that too.

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Postby Bade » 16 Dec 2006 05:41

I have both Citibank and ICICI NRE accounts. Citibank has been good so has ICICI too, though in the case of the latter the initial setting up of the account felt almost like having walked into one of the state owned banks in India.

Alok_N, it is high time you enjoyed the power of online money transfers to your NRE a/c in india. ICICI beats citibank at it and I think also gives a slightly better exhange rate, though I have not bothered to cross compare making transfers the same day.

Last year I even had the pleasure to withdraw money using ATM in rural kerala at a Dhanalakshmi bank machine with no added service charge using my Citibank ATM card. It worked also at the Federal Bank (?) in tvm.

This year had to deal with my village Indian Bank to get a DD issued and it took 45 minutes. With online NRE a/c with Citibank it is done usually in less than 5 minutes as long as the servers are working at the other end.

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Postby Alok_N » 16 Dec 2006 05:57

electronic bank transfer has been implemented by IDBI also ... 8)

here's their procedure ... first you wire the money to some holding bank in New York ... then you send a fax to that bank with the routing for the money to your account in India ... in such a manner the funds arrive in India at a lightening speed of 3-5 days ... :lol:

that is, of course, if the New York dude didn't lose you fax ... in that case you have to get on this ultra-modern device called a telefoon and try to track down someone in New York while sweating bullets about where your money might be ... :shock:

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Postby Bade » 16 Dec 2006 06:09

OK with ACH ( automated clearing house) enabled transfers you do not have to worry tracking the transfer. Still it takes 3-5 days for the money to show up at the other end, except that no phone calls needed.

I used the method mentioned by you 3 years ago to tranfer money to Mumbai when my dad got hospitalised in transit. The local Bank of America guy had no clue about swift numbers etc. and he insisted that no such thing exists in NY :roll: I literally had to show him the rules and method using printout of the instructions and he finally agreed. This was in the technology county of Fairfax :P

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Postby Suraj » 18 Dec 2006 06:13

Regarding Alok_N's questions in economics thread:

The Rupee will continue to appreciate. The current position itself is lower than it would be, because the RBI spent months attempting to playin against the market, lowering the exchange rate from the ~Rs.43.5/$ at the time, all the way down to Rs.46.5/$, and now back to ~Rs.44.7/$ . See the following chart: USD-INR in the last 1 year.

Sudden collapses in the USD are unlikely, but appreciation in INR value will keep happening. There's really point in attempting to 'time' the market. Sometimes you get lucky (I sent home a packet when the INR bottomed out in summer, giving me a much better exchange rate than now), but in general if you average the remittances, your Rupees will keep reducing for a given USD figure, in future.

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Postby Alok_N » 18 Dec 2006 08:18

Thanks Suraj,

I am interested in the timing game because I have to pay installments on an apartment in India ... I also made a transfer in Aug '06 around the peak time ... I have been playing the waiting game since then ...

if it is downhill from here, I am better off transferring all of it now ... of course, I should have tranferred all of it in Aug ... :(

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Postby milindc » 18 Dec 2006 10:17

Transfering money to India...

HDFC has good process. You wire transfer the money into a account with US bank (costs $12 with my bank for each wire transfer) and the money gets deposited in our NRE/NRO account. You can provide all the details as part of the wire transfer. Great for transfers of $3000+. I have used HDFC's service umpteen times and the money gets deposited the same night (US time) if it is a business day in India. Actually if you are sending large sums then you can negotiate the exchange rate with bank manager. I got 10-15 paisa more based on the total remittance amount.

HDFC also has an online facility to remit money to India directly from your US bank checking account. I haven't used it and hence don't know the commission charged per $. There are no fees though.

Citibank/Other US banks claim that it will be no fee transfer, but you get a lousy exchange rate. I heard that, ICICI is also good from NRIs, but based on the home loan process experience, I have completely avoided them.

If you just want to send money to India and there is no urgency then just use a regular US bank check and deposit it in Indian bank. You will get a great exchange rate. The timeline will be about 20-30 days.

Alok_N,
I noticed that rupee kinda bottoms out between Dec 20-Jan 5, no idea why? Last year it was b'cos of the SBI's bonds were maturing, couldn't find a valid reason for 2004. Just a hunch.. keep an eye on the xchange rate in next couple of weeks.

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Postby Dileep » 18 Dec 2006 20:43

The wire trfr to a US account thingie is good once it is set up. I couldn't make the manager of the BOFA branch understand, and had to walk out. I use the ICICI online which is pretty OK.

You can in fact directly transfer to HDFC account as an international trfr. Costs $42


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