Remittance of own funds outside india
This query is : Resolved
17 December 2014
dear sir,
i have query , if a nri out of his savings in australia has remitted around rs.20 lacs INR to his normal saving account in india and now want to transfer it back to australia, what are the tax implications involved and what is the procedure to do so.
i have query , if a nri out of his savings in australia has remitted around rs.20 lacs INR to his normal saving account in india and now want to transfer it back to australia, what are the tax implications involved and what is the procedure to do so.
17 December 2014
Repatriation: NRE account is freely repatriable (Principal and interest earned) while the NRO account has restricted repatriability i.e permitted remittance allowed from NRO is up to USD 1 million net of applicable taxes in a financial year after giving undertaking along with a certificate from a chartered accountant.
Tax Treatment: NRE account is Tax free (no Income tax, wealth tax and gift tax) in India. On the other hand the interest earned in NRO account and credit balances are subject to respective income tax bracket.
Tax Treatment: NRE account is Tax free (no Income tax, wealth tax and gift tax) in India. On the other hand the interest earned in NRO account and credit balances are subject to respective income tax bracket.
18 December 2014
Sir the saving account in india is niether NRE nor NRO account, it is the account which he ws operating before going to australia
18 December 2014
Resident Savings Account
Most individuals make a mistake of continuing a resident savings account even after becoming a NRI but the law does not allow it. Or in simple words it’s ILLEGAL to hold savings bank account for NRIs. As per FEMA regulation, when a status changes to NRI the resident savings account have to be converted to a NRO account.All income which is receivable in India such as rentals from property, investments, pension etc has to be deposited in this account and any payment towards insurance premiums or EMIs on loans which you availed while in India also has to be mandated from NRO account. For this you need to inform your bank on status change within a reasonable time period.(This period is not defined but you can consider maximum 3 months) The bank then will designate your existing resident account to NRO account and your payment will continue as it is. Alternatively, you have an option to close existing account and open a new account in case you choose to change your bank.Do remember that if you continue the resident savings account and it come to the notice you will be penalized for the same. Funds from NRO account are now repatriable upto $1million now but with a condition that you have obtained a certificate from Chartered Accountant for payment of taxes as applicable on your income in India. For depositing funds from abroad one will need an NRE account where there is no limit on repatriating funds back to the resident country.
Most individuals make a mistake of continuing a resident savings account even after becoming a NRI but the law does not allow it. Or in simple words it’s ILLEGAL to hold savings bank account for NRIs. As per FEMA regulation, when a status changes to NRI the resident savings account have to be converted to a NRO account.All income which is receivable in India such as rentals from property, investments, pension etc has to be deposited in this account and any payment towards insurance premiums or EMIs on loans which you availed while in India also has to be mandated from NRO account. For this you need to inform your bank on status change within a reasonable time period.(This period is not defined but you can consider maximum 3 months) The bank then will designate your existing resident account to NRO account and your payment will continue as it is. Alternatively, you have an option to close existing account and open a new account in case you choose to change your bank.Do remember that if you continue the resident savings account and it come to the notice you will be penalized for the same. Funds from NRO account are now repatriable upto $1million now but with a condition that you have obtained a certificate from Chartered Accountant for payment of taxes as applicable on your income in India. For depositing funds from abroad one will need an NRE account where there is no limit on repatriating funds back to the resident country.
18 December 2014
sir i understand your pt. but please tell me what are the implications in the current situation , whether it it can be done or not.
19 December 2014
First covert your a/c to NRO/NRE by contacting your bankers. then you can transfer the money.
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