S Lohia & Associates

A. When a non-resident (NRI/OCI) plans to sell a property in India, other than the general property selling issues one additional challenge is TDS. As per the India Income Tax Law, buyer is under obligation to deduct TDS at the highest rate (i.e. 12.50% plus SC on long term gain and 30% plus SC on short term gains) on total sale consideration of property. Though, the actual tax liability may be quite low if cost is also considered. However, buyer is not authorised to consider the cost while deducting the TDS. In this case, as per the provisions of Income Tax Act, seller (Non-resident) can file an application in Form 128 (earlier form 13) with the income tax department with sale agreement, purchase docs and some other docs. Inc Tax Deptt after considering all the facts, issue a Lower TDS certificate, and then buyer can deduct the TDS according the Lower TDS Certificate. Read more

A. As per ITR form requirement, residents are required to report their foreign assets in FA Schedule of ITR. With the introduction of Black Money Act 2015 (BMA), this disclosure requirement has been very significant as there are high penalty provisions under BMA for non-disclosure of foreign assets and income in the ITR Form. This requirement applies to Ordinary resident. Hence, NRIs/OCIs, who have returned back to India, and Foreign citizens who are living/working in India, need utmost caution in this regard. Students who comes back after foreign education, or Indian company employees who get RSUs/ESOPs of foreign companies, also residents who remit funds outside India under LRS umbrella, all are required to report their foreign assets & income in ITR form. Read more

A. When a Non-resident (NRI/OCI) wish to repatriation funds from NRO account to NRE A/c or Foreign A/c, a request is needed to be made to bank (online or offline as per the bank procedure). Bank requires certain documents/information before processing this remittance request. One of the information requirement is Form 145 and 146. These forms are required to be submitted with Income Tax Department online (www.incometax.gov.in). Form 146 is a Chartered Accountant certificate and Form 145 is required to be submitted the taxpayer/remitter (i.e NRI/OCI). NRI would require CA services to get it done. CA do require information about source of funds (to verify that funds are tax paid in India) and then prepare & file the forms, and provide acknowledgement (with his UDIN thereon) to NRI can provide it to bank to complete the remittance process. Read more

A. In all the countries across the world, countries/employer provide an umbrella to contribute some amount of salary to Retirement Schemes. These funds meant for specifically financially support the employee post-retirement. NRIs/OCIs employed outside India also do contribute to these schemes. These schemes are named as 401k/Roth IRA (USA), SIPP (UK), Super Fund/SMSF (Australia), CPF/SRS (Singapore), RRSP/RRIF (Canada) etc. Contributions to these funds are made generally made out of the salary (employer as well employee contribution). Taxability of these retirement accounts vary differently. Out of these, there are certain schemes where taxation happens at the time of withdrawal (e.g. 401k). In India, in case of returned NRIs/OCIs, under the general provisions, income arising from these accounts are taxable in India on accrual basis (e.g. dividend, interest, capital gain etc). Now, it creates inconvenience for returned NRI/OCI where they have to pay taxes in India though there is no liquidity in their hands from these funds as the withdrawal can take place at some specific age (and the respective country also tax it on withdrawal basis, hence, foreign tax credit claiming issues also arise). Hence, to cover up these complications, India tax regulators have provided an alternative window via section 89A (section 158 of new income tax law 2025), Rule 21AAA (Rule 74 of new income tax rules) and Form 10EE (now new form 40). Under this umbrella, a taxpayer can choose to form 10EE (new Form 40) with his ITR and opt to postpone the taxation of the foreign retirement accounts to the year when he/she withdraw the funds from the retirement account. Hence, the India tax laws are aligned with foreign tax law in relation to the Retirement Fund Accounts. Read more

A. NRIs, OCIs must file ITR in India on regular basis. Due to their roots & family (and various other reasons) in India, NRIs do various financial transactions in India (regularly/occasionally). These transactions get recorded with Income tax deptt also (directly or indirectly). Many of these transactions generate income also and TDS also deducted thereon. Source of funds for these transactions are inherited funds, savings in India or remittances from abroad. This is important to keep Inc Tax Deptt updated about their non-resident status so that information reflecting on tax portal does not trigger investigations. Also, filing ITR can provide income tax refund for TDS etc. Hence, filing ITR is very recommended and useful. Due date for Non-resident ITR filing is generally July 31 of every year. Delayed ITR can be filed after July 31 also (upto Dec 31). There is also a provision of filing ITRs for earlier years (upto 4 preceding years) via Update ITR (ITR U). Read more