NRI Investment in India and R2I Financial Concerns

Gus · Post by **Gus** » 06 Aug 2010 03:22

Vipul wrote:To all US Citizen Rakshak's who have gone the R2I route, Can you please share your experiences of filing the US Tax returns from India.How does the Double Taxation avoidance thingie work?? Especially when the Indian tax returns are for the April-March timeframe and the US are for Jan-Dec.I am confused thinking about it and would like to hear how its is done/accomplished.

request seconded.

I may also R2I in end of 2011. May or may not run back to massaland depending on how it all turns out in India.

I have some 30K in 401K. I am not sure on what to do with that. Leave it alone or withdraw and remit to India?

How to handle all this...I have no idea.

I am also exploring ideas on going 'independent' in India. I have good contacts and can get into consulting gigs (Oracle Applications) and work remote from India...maybe travel once to client site to gather requirements. I can design and build remote. How feasible it is with Indian Income tax laws etc?

Has anybody done such a thing here

Howard Schuster · Post by **Howard Schuster** » 04 Sep 2010 06:05

NRIs from all over the world can invest in Indian equities, ETFs, mutual funds (debt & equity), Futures and Options. Here is more info:
http://www.profitshastra.com/services.html

Trading, demat, appropriate NRE or NRO account and obtaining Portfolio Investment Scheme (PIS) permsion
from RBI is made very simple for the NRI.

Forms are sent to NRIs home address which only needs to be signed (takes roughly 20 minutes). NRI sends the signed forms to the back office team in India which fills out all the forms using NRIs documentation (Passport, PAN card, address proff) and 4 accounts are opened together.

This is also applicable for USA and Canada based NRIs. The only difference is that USA and Canada based NRIs can't trade online. A personal trader or dealer is assigned to these NRIs. Rest other NRIs (Gulf, Australia, Newzealand, Africa etc.) can choose to trade either online or offline.

Profitshastra's founder is a former NRI investment banker who understands the needs of NRIs and knows how to deliver first class service.

Manishw · Post by **Manishw** » 04 Sep 2010 06:21

Profitshastra Ji I guess your avatar name and post are ready for meeting 72.

Howard Schuster · Post by **Howard Schuster** » 04 Sep 2010 06:42

Meeting 72?

vera_k · Post by **vera_k** » 04 Sep 2010 07:10

Profitshastra wrote:Meeting 72?

Aspects of paradise

Raja Bose · Post by **Raja Bose** » 04 Sep 2010 11:27

Profitshastra ji, this is not a forum for advertising your wares.

amdavadi · Post by **amdavadi** » 07 Apr 2011 22:52

DOJ asking HSBC India to give them names of american who has account with them....now IRS is going after
desi who has accounts in India.....

RamaY · Post by **RamaY** » 07 Apr 2011 22:53

^ The unkil is coming

amdavadi · Post by **amdavadi** » 07 Apr 2011 23:01

unkil wants to make up for lost revenue....soon MMS will present budget to unkil before it is presented to parliament

svinayak · Post by **svinayak** » 07 Apr 2011 23:45

amdavadi wrote:DOJ asking HSBC India to give them names of american who has account with them....now IRS is going after
desi who has accounts in India.....

I was talking to the VP of the business banking of HSBC about the same topic. He has said that all govt have been careful of these accounts.

RamaY · Post by **RamaY** » 07 Apr 2011 23:48

^ acharya-san

What do you mean? The govts are careful in giving the info to massa or not giving?

svinayak · Post by **svinayak** » 07 Apr 2011 23:56

RamaY wrote:^ acharya-san

What do you mean? The govts are careful in giving the info to massa or not giving?

All banks are scrutinized and every transaction esp. foriegn ones are tracked. Auditors question every account and nature of the business.

amdavadi · Post by **amdavadi** » 08 Apr 2011 00:22

They been doing that since 01...

svinayak · Post by **svinayak** » 08 Apr 2011 01:04

More now and Desi IT companies are on the radar
They invoice directly to Indian company and avoid taxable income

ManjaM · Post by **ManjaM** » 09 Apr 2011 07:14

http://timesofindia.indiatimes.com/nri/ ... 915510.cms

While millions of Americans are sweating it out to file their tax returns before the April 15 deadline, Uncle Sam's taxman has zeroed in wealthy Indian-Americans suspected of using their native land to stash away undeclared money and evade taxes. Yes; while India has long believed its wealthy has stashed away money abroad, the wheel has turned a full circle. The US now says its Indian-American citizens are using India as a tax haven.

krisna · Post by **krisna** » 09 Apr 2011 07:16

Acharya wrote:
RamaY wrote:^ acharya-san

What do you mean? The govts are careful in giving the info to massa or not giving?
All banks are scrutinized and every transaction esp. foriegn ones are tracked. Auditors question every account and nature of the business.

http://forums.bharat-rakshak.com/viewto ... 2#p1066802

saip · Post by **saip** » 09 Apr 2011 07:46

This thing happened few years back too. At that time State bank of India (or may be another Indian bank) had to pay fine and agree not continue the practices. At that time as far as I know no account particulars were given to US Govt

vera_k · Post by **vera_k** » 10 Apr 2011 06:17

Marten wrote:That is why one must have accounts with coop banks and of course SBI! Let's see who can bully them! Then again, perhaps IRS play by asking MMS chacha very nicely.

The smart ones route the money through Dubai. That way neither MMS nor IRS can get their paws on it, and no one can claim cap gains tax on property transactions.

sampat · Post by **sampat** » 20 May 2011 23:13

Is there a way to transfer around 10-20 lakh Rupees to Europe? Does anyone know the expense and process involved? This is personal money received as a gift in India.

Altair · Post by **Altair** » 29 May 2011 12:59

sampat wrote:Is there a way to transfer around 10-20 lakh Rupees to Europe? Does anyone know the expense and process involved? This is personal money received as a gift in India.

Expenses come second. It is the purpose to transfer the money. This would be the first question a bank manager will ask you. Please do not say I am wiring to Mohamad atta to topple some tall buildings in europe

Just kidding

If it is for education, you will need an offer letter from university,I20, admission letter and then bank will create a DD in university name etc..
For business, the rules are even tough. what kind of business, the incorporation certificate of that business etc..It is a painful process. The GoI has made it tough to transfer money out of India and easier to get money inside India.
There are however other "legal" and "illegal" ways to transfer money out of India. I cannot discuss here. You can call me if you are interested.
I am into wealth management so can advise you in this regard.

Neshant · Post by **Neshant** » 29 May 2011 14:58

That is why one must have accounts with coop banks and of course SBI! Let's see who can bully them!

there is no way in hell India would hand over SBI accounts to the US.

the west has been the beneficiary of massive amounts of funds stashed overseas by crooks and tax evaders from the third world all throughout the 20th century.

why would India oblige?

sampat · Post by **sampat** » 04 Jun 2011 14:03

Altair wrote:
sampat wrote:Is there a way to transfer around 10-20 lakh Rupees to Europe? Does anyone know the expense and process involved? This is personal money received as a gift in India.
Expenses come second. It is the purpose to transfer the money. This would be the first question a bank manager will ask you. Please do not say I am wiring to Mohamad atta to topple some tall buildings in europe Just kidding

If it is for education, you will need an offer letter from university,I20, admission letter and then bank will create a DD in university name etc..
For business, the rules are even tough. what kind of business, the incorporation certificate of that business etc..It is a painful process. The GoI has made it tough to transfer money out of India and easier to get money inside India.
There are however other "legal" and "illegal" ways to transfer money out of India. I cannot discuss here. You can call me if you are interested.
I am into wealth management so can advise you in this regard.

Hi altair, could mail me your contact info at mango.aadmi11 AT gmail DOT com. To clarify few things. I am NRI and the money in question is a gift from family member deposited by check in my saving account (Not NRI account) in India. Some one told me that NRI's are able to repatriate equivalent of 100 000 $/year. Is it true?

a_bharat · Post by **a_bharat** » 04 Jun 2011 15:53

^^^
Under RBI's Liberalised Remittance Scheme (LRS), an Indian resident (not sure if one has to be a citizen) can remit upto $200,000 per year for a number of purposes (forex trading is expressly prohibited). From the RBI LRS FAQ:

Q.1. What is the Liberalised Remittance Scheme of USD 200,000?

Ans. Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 200,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.

Q.2. Please provide an illustrative list of capital account transactions permitted under the scheme.

Ans.. Under the Scheme, resident individuals can acquire and hold immovable property or shares or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme.

Banks like HDFC and ICICI can do wire transfers (they call it TT -- Telegraphic Transfer) to your overseas account. Sometimes the employees may not be aware of LRS, and you may have to educate them and make them talk to their managers.

Bade · Post by **Bade** » 06 Jun 2011 23:25

sampat wrote: I am NRI and the money in question is a gift from family member deposited by check in my saving account (Not NRI account) in India. Some one told me that NRI's are able to repatriate equivalent of 100 000 $/year. Is it true?

If you are an NRI, I do not think you can legally hold a simple savings a/c in India. Better find more info about it before you make the transfer. From my reading you can put all your India income and gifts only in a NRO a/c for sure. Or the other option is to put it in an a/c held by a India resident parent's a/c and make you the final beneficiary of the a/c balance.

sampat · Post by **sampat** » 08 Jun 2011 18:32

Bade wrote:
sampat wrote: I am NRI and the money in question is a gift from family member deposited by check in my saving account (Not NRI account) in India. Some one told me that NRI's are able to repatriate equivalent of 100 000 $/year. Is it true?
If you are an NRI, I do not think you can legally hold a simple savings a/c in India. Better find more info about it before you make the transfer. From my reading you can put all your India income and gifts only in a NRO a/c for sure. Or the other option is to put it in an a/c held by a India resident parent's a/c and make you the final beneficiary of the a/c balance.

Thanks for the information. I was not aware that NRI's can't legally hold saving A/c in India. This is all too confusing. Should have open an NRO account.

somnath · Post by **somnath** » 08 Jun 2011 18:36

sampat wrote:Thanks for the information. I was not aware that NRI's can't legally hold saving A/c in India. This is all too confusing. Should have open an NRO account

Not at all...NRIs can aboslutely hold savings a/c in India...there are 2 types:

NRO: non-repatriable - money cannot be repatriated abroad, only sent in
NRE: repatriable - money can be repatriated abroad any time...

All banks would have these facilities - they are pretty basic...

Bade · Post by **Bade** » 08 Jun 2011 20:40

I thought the question was when the source of money (or gift) is from India. In that case how can he use NRE a/c ? All India based income, be it gift or rental or capital gains has to go into a NRO a/c.

The NRE a/c is useful if you are pumping money in from outside India and is fully repatriable, though I do not know of anyone who has done the reverse transfer out of India.

Here is another scenario, say you invested in buying real estate out of proceeds from abroad entirely using NRE a/c as the conduit. Then you sell the property later where do you put the money ? Do you put the part equal to the amount invested (purchase price + interest payments if made with a loan) initially by you into an NRE a/c and the rest, the capital gains part of the sale price into a NRO a/c. ?

Has anyone done this before.

somnath · Post by **somnath** » 08 Jun 2011 20:54

^^Upto a million dollars a year can be repatriated out of an NRO a/c every year..Its a bit more tedious than from an NRE a/c, requires a CA cert and all that, but can be done...

Nandu · Post by **Nandu** » 21 Jul 2011 22:30

Folks, if I buy/build a second house in the US using a loan, and rent it out, the loan interest can be deducted as a business expense against the rental income.

What are the tax implications, if any, if I want to build or buy a house in India, which I will not be occupying?

vera_k · Post by **vera_k** » 22 Jul 2011 19:02

The US treatment will stay the same, except that the house will be assessed to tax in India based on deemed income.

How NRIs can buy property in India

According to the Indian Income Tax Act, if a person (resident or NRI) owns more than one house property, only one of them will be deemed as self-occupied. There will be no income tax on a self-occupied property. The other one, whether you rent it out or not, will be deemed to be given on rent. If you have not given the second property on rent, you will have to calculate deemed rental income on the second property (based on certain valuations prescribed by the income tax rules) and pay the tax thereof.

Gus · Post by **Gus** » 08 Aug 2011 20:08

What is the short term outlook on USD INR exchange rates? It is holding steady at 44.5 to 45 now...I don't mind this. I have some 20K that I am planning to transfer to India as I R2I before the end of this year.

Also - I am utterly confused about what to do with my 401K.

I would like to take that money out and invest in India, primarily because India will always be the place I will retire to - no matter where I work..and also the long term performance would be better if money is in India than in the US.

What is my best option? Roll it over to IRA and then withdraw from it next year when I am in RNOR status in India? This way I would only pay the early withdrawal penalty and no tax in India and the US (because I will have no income in US next year?) what should be the amount of money I can withdraw safely this way?

vera_k · Post by **vera_k** » 08 Aug 2011 21:43

Depends on how much you have in the 401k. If that is hundred of thousands, it would be worth exploring a move to Dubai or other low tax regime places while withdrawing. Working out of Nepal/Bhutan/Sri Lanka may be possible if you have that kind of job.

Gus · Post by **Gus** » 08 Aug 2011 22:39

^lol...no...

just about 40K. petty cash for you.

SwamyG · Post by **SwamyG** » 08 Aug 2011 23:02

My philosophy is a bird in hand is worth two in bush. I never bought into 401K gupshup, so I did not invest in 401K for a long time. So my pool in 401K is very very small. I plan to get it out, pay the 10% fine and taxes; and invest it as I please by myself. Even if I were to buy a small plot near Kanchipuram or Tiruttani it would appreciate more than maasa 401K. Of course, since you would be in desh, I expect you will keep an hawk's eye on the plot. Else the land mafia will gobble it up. You will be left with no bird.

It is worth all the IRA machinations, if you are going to save a huge deal, if it is going to result in a few thousands of dollars onlee...I would say trust in desh

SwamyG · Post by **SwamyG** » 08 Aug 2011 23:06

Bade saar: I bought a flat in desh, using money from here. The rental income goes into my savings account - jointly held with my father. I have a PAN # and file taxes, though I do not require to file. I hear one does not have to file taxes, if the taxable income is less than 5L per annum.

chaanakya · Post by **chaanakya** » 08 Aug 2011 23:10

SwamyG wrote:Bade saar: I bought a flat in desh, using money from here. The rental income goes into my savings account - jointly held with my father. I have a PAN # and file taxes, though I do not require to file. I hear one does not have to file taxes, if the taxable income is less than 5L per annum.

Only for salaried. from CAY. but always better to file.

Bade · Post by **Bade** » 08 Aug 2011 23:16

recently ICICI bank called to close my NRO a/c as it was not active. Meaning it had zero balance, well it did not have any amount ever in it since I only had reason to use the NRE a/c. They had given the other for free as part of the deal, with no extra paperwork. Was wondering if the action on their part had to to with stricter reporting norms in place with time.

SwamyG, how can you buy anything in India without a NRE a/c as a non-resident, even if you had worked there a looong time back and had a ordinary savings a/c.

SwamyG · Post by **SwamyG** » 08 Aug 2011 23:22

I did not say I do not have NRE/NRO account. The builders and developers will also take personal cheques issue from here. All my transactions were through the bank systems of both countries, and no black money. So I do not know for sure if one needs an NRE/NRO account, I have them though.

Bade · Post by **Bade** » 08 Aug 2011 23:33

aha ! I never used US issued personal cheques to buy anything there, it was always pumped through the NRE a/c, though I have repatriated money via US cheques for day to day needs at home for folks.

Gus · Post by **Gus** » 09 Aug 2011 01:06

SwamyG wrote:My philosophy is a bird in hand is worth two in bush. I never bought into 401K gupshup, so I did not invest in 401K for a long time.

Well..company match works out good sometimes. Mine gives me a dollar for every 2 dollars I put in (capped at 6% of pay). The way I see it, I put in 20K, they gave me 10K. I have still made 30K-3K = 27K, no? It is a bit less than 27K now, because of the recent bloodbath..but I figure that by the time I am ready to withdraw, I should be ok and I am ok with being ok