A44 BUsINess India Abroad September 25, 2015
the government to move these permits online, as
well as resolving insolvency due to a new bankruptcy
code, expected in FY16,’ he added.
While the Moody’s prediction is limited only to the
current financial year, Goldman Sachs has taken a
five-year view of the Indian economy.
Cisco’s project IndiaG
Networking giant Cisco too is betting big on India’s
The company has set an ambitious target of doubling its India revenues in the next three to five years
to $2 billion.
Cisco’s new focus will be on high-growth verticals
like e-commerce, education, manufacturing, energy
The G in IndiaG stands for growth.
New York’s Falcon
Edge Capital says Ola
Falcon made this investment public in a RoC filing
dated September 8.
Ola was valued at $2.5 billion six months ago when
Russian billionaire Yuri Milner’s DST invested $450
million in Ola.
recently in reply to a question in
India Abroad (september 4), you
mentioned that a Person of Indian
Origin (Nonresident Indian with foreign citizenship) cannot sell real
estate to a resident; he has to sell it
either to an NrI or to a PIO only.
Can you please clarify?
I have an apartment in India and a
commercial space (shop) that I am
thinking of selling. I am a United
states citizen, born in India and have
a Overseas Citizenship of India Card.
Does that mean I have to find another NrI/PIO only to sell the property?
— Sanjiv Modi
The reply to the query contained an inadvertent error on
our part for which we are extremely sorry. It is actually the
other way around — a PIO cannot sell his property to another
NRI or PIO, he has to necessarily sell to a Resident Indian
only. What was stated in the previous reply was the reverse.
The full text of the law is as follows:
A PIO can transfer any immovable property in India (other
than agricultural land / farm house / plantation property)
by way of sale to a person resident in India. He may transfer
agricultural land / farm house / plantation property in
India, by way of gift or sale to a person resident in India, who
is a citizen of India. He may also transfer residential or commercial property in India by way of gift to a person resident
in India or to a person resident outside India, who is a citizen
of India or to a Person of Indian Origin resident outside
India. (Master Circular No. 4/2015-16 dated July 1, 2015)
In other words, a PIO while allowed to gift his immovable
property to either a Resident or to another NRI /PIO, a sale
transaction (or gift of agricultural land etc.) has to be necessarily effected to a Resident Indian only.
Similar clarification has been sought by India Abroad
readers, Mr B Desai as well as Mr M Godbole. Their queries
haven’t been separately listed as it will amount to repetition.
The error is sincerely regretted.
My query is about the Life Insurance Corporation pension
monthly amounts and a lump sum maturity amount payable
to me in December. I am a Us citizen and I had purchased all
three policies from LIC in Mumbai before coming to the Us.
1. Is there any way (other than depositing in the Nonresident
Ordinary account) of depositing these amounts directly in my
mother’s name into her own account (even though the pen-
sion/maturity amounts are in my name)?
2. My mother is a joint holder in my
NrO account in Canara Bank from
which I am getting a monthly pension and my mother has her own savings bank account in Canara Bank.
3. I am a joint holder in my mothers
sB account in state Bank from which
I am getting the second LIC monthly
4. I will also be getting an amount
of around rs 500,000 ($7,500) on
maturity of my third policy in
December 2015, which I am hesitant
to deposit in the NrO account due to
the 30 percent tax deduction. If there
is no other option but to deposit in
the NrO account, how do I get a refund of the 30 percent
— Juliet Pinto Venukrishnan
The income from an investment belongs to the investor
concerned. In this case, all streams of income from the lIC
investment have to be credited to your bank account since
you are the original investor. However, once you have
received the credit for the income (in your account), you are
free to transfer the same to anybody, including your mother.
Also, you cannot escape tax liability by merely diverting the
income. All the receipts from the pension account are fully
taxable and the tax deducted at source is applicable whether
you are a resident or an NRI.
What you can do is file your tax returns for the year and
claim a refund, depending upon your taxable income from
I will be a returning Indian in the next financial year. I
would have stayed overseas for 10 years continuously. I understand that my tax status will be ‘resident Not-Ordinarily
resident.’ What will be the tax implications on earnings from
my Nonresident external and Foreign Currency Nonresident
accounts in India and from earnings on overseas income?
Will I be taxable on such income? If not, then for how many
years after my arrival in India? For how long can I retain my
overseas investments? Do I require declaring upon arrival?
The Foreign Exchange Management Act Section 6(4)
has granted general permissions to a person resident in
India to hold, own, transfer or invest in foreign currency,
foreign security or any immovable property situated out-
side India if such ‘Foreign Currency Assets’ were
acquired, held or owned by such person when he was res-
ident outside India or inherited from a person who was
resident outside India.
If the residential status of the returning NRI has
become RNOR, his forex income will be tax-free in his
hands until he becomes a full-fledged Resident.
Interest on NRE account is tax-free until the account
holder returns to India. It becomes taxable from the date
of his return. In other words, the interest is tax-free in
India and the entire corpus is repatriable any time as
long as the account holder remains an NRI as per
FEMA, irrespective of his residential status as per ITA.
Sec 10(15fa) exempts interest ‘by a scheduled bank to a
non-resident or to a person who is not ordinarily resident within the meaning of sub-section (6) of section 6
on deposits in foreign currency.’ FCNR and RFC are the
two accounts covered by this section.
You may retain your overseas assets and investments
for as long as you desire. For the first two years of your
stay in India, the income from FCNR and from overseas
investments will be tax-free in India on account of your
A N SHANBHAG SANDEEP SHANBHAG
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 firstname.lastname@example.org
the tax implications when an nRI moves back to India
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a worker scans the barcode on an air bag inside the factory of air bag maker Rane tRW Steering System ltd at Singaperumal Koil, tamil nadu. the world’s largest air bag suppliers are setting up plants and ramping up capacity in India, eyeing a $2 billion opportunity thanks to tougher rules aimed at improving one of the world’s worst road-safety records. ReUteRS