Ram is an NRI for last more than 20 years. He visited India every year during last 20 years. Now he is planning to return to India permanently.So, he would like to understand ITA and FEMA rules before returning to India. He is maintaining NRO and NRE accounts in India. He has several FDs in NRO as well as in NRE accounts. He has invested outside India in real estate, bonds, structures and insurance products. Some of the bonds and structures are bought and sold on frequently basis. Bonds and Structures are mainly leveraged by taking loan from holding banks. He has also taken various life insurance policies where he pay premium on monthly and half yearly basis. All his accounts and investments are in joint name with his wife.
I have following questions:
- Can he continue his investments after returning to India/after becoming resident?
- Can he continue buying / selling and buying new bonds and structures with leverage even after he becomes resident in India?
- Do he need any permission form RBI or from any where else before buying selling bonds/structures outside India as a resident.
- Can he remit money from abroad from his personal accounts as resident.
- Can he continue paying Insurance premium from overseas accounts?
- What if his wife who is housewife becomes resident before he do?
- As I understand that as per ITA he can enjoy tax free period up to maximum 3 years from the time of returning to India.
A person who qualifies as a resident for any tax year can be treated as an RNOR if the following two conditions are met:
The individual has been a non-resident in India for nine of the past ten tax years, and
The individual has been in India for a total of 729 days or less during the seven tax years preceding the relevant tax year.
- How much time he gets after returning to India to declare to banks that he has changed his status so that banks can change his accounts from NRE to RFC or EEFC accounts. Can he maintains NRE and NRO accounts till the end of financial year?
What are the precautions to be taken before becoming resident.
CAclubindia
