India Abroad January 10, 2014 A25 PERSONAL FINANCE
— Parag Sahi
My father lives in India. His accounts are in his name
alone. We were wondering if my name could be added as a
joint holder in his resident savings account. I am a United
States citizen living in the US.
Yes, this is possible. A resident Indian can include a Non-Resident Indian or Person of Indian Origin close relative(s)
as a joint holder(s) in their resident bank accounts, including their Exchange Earner’s Foreign Currency/Resident
Foreign Currency on ‘former or survivor’ basis. However,
such a joint holder shall not be eligible to operate the
account during the life time of the resident.
As we interpret this rule, the ‘former’ who is the resident
owner of the account is the only person who is authorized
to operate the account and the survivor (NRI/PIO) comes
into the picture only when the former passes away.
I have sold my house and earned substantial long-term
capital gains. I wish to avoid paying tax, but at the same time
do not want to reinvest in another property.
I was advised to put the money into tax-saving bonds. I am
given to understand that these bonds come with a lock-in of
What my advisor isn’t clear about is after the expiry of
three years, whether the funds released are repatriable.
Though I am told that it is not, I wish to confirm whether
the maturity amount is indeed non taxable.
—- Sukumar Ganesan
The maturity amount of the bonds will have to be credited to your Non-Resident Ordinary account (not Non-Resident External). As per the law, an equivalent of $1 million may be remitted abroad from one’s NRO account.
Forms 15CA & CB need to be submitted. This is as per the
current rules. Three years from now, these rules may or
may not be the same.
I have been living in the US for over 25 years now. I retired
— Prem Sagar
recently. I plan to alternate living in the US and India.
However, there could arise occasions when I end up in India
for 7 to 8 months of a year. How can I achieve this without
attracting tax incidence on my foreign income (foreign to
If you become a resident by virtue of your being in India
for 182 days in the financial year or 365 days out of the preceding four FYs AND 60 days in the FY, you will have to pay
tax on your global income. We are afraid there is simply no
getting around this rule.
However, you may be aware of a transitional status of
Resident but Not Ordinarily Resident between being an
NRI and becoming a full-fledged Resident. RNOR is a per-
son who satisfies one of the following conditions:
An RNOR is not required pay tax in India on his forex
income. So for the first two years of your return to India
you would be an RNOR by the virtue of which you will not
have to pay tax on your US income. However, once the
RNOR status is no longer applicable, you will have to sub-
mit your global income to tax.
We are settled in the US. My father is over 80 years of age.
Recently a relative told us that under the new rules of filing
income tax returns in India the exemption limit for senior
citizens over 80 years is Rs 500,000 ($8,000 — the basic
threshold of income that is exempted). If this is so, my
father would benefit since he has rental and other
interest income in India for which we get his tax returns
— Vartak C
The normal limit for income tax exemption for Senior
Citizens is Rs 250,000 ($4,000). A couple of years ago, a
new category of taxpayers called Very Senior Citizens for
whom an enhanced limit of Rs 500,000 was introduced.
However, this enhanced basic exemption limits are only
applicable to resident Indians. For NRIs, irrespective of
their age, the general limit as applicable to the normal taxpayer (Rs 200,000 or $3,200) is applicable.
My brother who lives in India and I had inherited some
land when our father passed away. We built a house on that
land. I remitted my share of the funds required from here
while my brother funded his share from his personal funds.
We intend to sell the house.
1. How do you establish the value of the land which was
bought by our father many years ago? No purchase price is
2. My other problem is establishing proof that the money
was sent from here. I have retained some documents of the
remittance, but not all.
3. How do you divide the proceeds of the house sale, and
how can I repatriate my portion, and is there a limit?
— Shastry P M
If the land purchase and subsequent house built has
been prior to April 1, 1981, then the Fair Market Value
as on that date (April 1, 1981) as assessed by an official
chartered valuer can be adopted as the official cost of the
From your query, the land in all probability has been
acquired before April 1981. However, if the house has been
built subsequently, you will have to have some documentary proof (payments made to contractors, builder etc in
rupees) as to its cost. Else you will have no other option but
to adopt the cost as nil.
Dividing the net sales proceeds (after taxes) between the
family members can be done as per the will of your parents
or in the absence of a will, by way of family arrangement. In
the case of any dispute, you will have to apply for a probate.
The limit for remitting the funds abroad is the equivalent
of $1 million per year. If your share is more than this, you
can stagger the proceeds over the years not exceeding $1
million per year.
Readers who wish to ask A N Shanbhag a question can
fill in the following details and mail the coupon to: The
Business Editor, India Abroad, 42 Broadway, 18th Floor,
New York, NY 10004
Or fax it to 212-727 9730
A N Shanbhag is an investment consultant and author of In the
Wonderland of Investment; How to Convert a Taxpayer into a
Taxsaver; NRI Investment Guide. This article does not constitute
tax or legal advice. Consult your tax or legal advisor before making
any tax- or legally-related investment decisions. The authors may
be contacted at email@example.com
The NRI and the Indian resident bank account
Stock market investors in India became richer by over Rs 1 trillon ($16.12 bil- lion) in 2013, as a 9 percent rally in
the benchmark Sensex helped total valuation of all listed firms rise to Rs 704.44 billion ($11.35 billion) at the end of a volatile
Those contributing the most to the stock
market wealth included Tata Consultancy
Services and firms like Infosys, Wipro, Tata
Motors and Maruti.
TCS shares shot up by over 71 percent in
2013, while Infosys gained 51 percent,
Wipro 40 percent, Tata Motors 20 percent,
and Maruti Suzuki 19.33 percent.
This was the third consecutive year of rise
in investor wealth.
In 2013, the benchmark Sensex rose by
The broader CNX Nifty of the National
Stock Exchange rose by 398.90 points or
‘Market experts attributed rise in investor
wealth to robust FII inflows and hopes of
wider reforms after the 2014 Lok Sabha
election helped to overcome concerns over
slowing economic growth and high infla-
tion,’ the Press Trust of India reported.
However, the year ended on apprehension for 2014.
‘It is going to be a very difficult year,’
Sankaran Naren, chief investment officer,
ICICI Prudential Mutual Fund, summed
up his outlook for 2014 for Business
The uncertainty over the impact of the
US Federal Reserve’s decision to withdraw
its stimulus package, India’s constant battle
with inflation and the upcoming general
election were pegged as the causes.
Stock market wealth soared in 2013,
nervousness for 2014