A. As per Article 13(5) of the DTAA between India and UAE/Singapore, capital gains arising from mutual funds may be taxable only in the country of residence. Capital Gain Article of DTAA of these countries (as well some other countries e.g. Saudi Arabia, Oman, Kuwait, Germany, Switzerland etc) does not provide specific taxation for Mutual Fund (though it provide specific taxation for shares). Hence, Mutual funds taxation goes under residuary clause of Capital Gain Article. Residuary clause provide tax rights to the country of residence. Hence, in many countries DTAA Mutual fund gain tax rights lie with the country where the taxpayer is resident. Hence, tax resident of these countries does not need to pay taxes on their mutual funds capital gain in India.
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A. In recent, judiciary have held in certain cases that capital gain of mutual funds falls in residuary clause of Capital Gain Article of DTAA. It was recently held by Mumbai Tribunal in the case of Anushka Sanjay Shah v. ITO (India-Singapore DTAA Article 13(5)), and Cochin Tribunal in case of K E Faizal Vs DCIT Intl Tax Kochi ITA No 423/Coch/2018/AY 2012-13 case (India-UAE DTAA Article 13(5)). Earlier years it was held in other cases also covering India-Switzerland DTAA etc. Hence, the matter got judiciary support also. Although, the matter still carry litigation as it need to be settled by some judgement(s) of High Court or Supreme Court.
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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.
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A. Yes, all the accounts, which is a foreign asset (as well income from these accounts), are required to be disclosed in FA schedule of India ITR if the taxpayer is an Ordinary Resident. For initial 1-2 years i.e. till the time returned NRI is a non-resident or Non ordinary Resident (NOR) there is no mandatory requirement to report foreign assets. However, once the person be an ROR (ordinary resident) he/she is under obligation to report all foreign assets including Foreign Retirement Accounts.
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A. In Budget 2026, the honorable FM of India has announced a one-time amnesty scheme (i.e Foreign Asset of Small Taxpayers – Disclosure Scheme 2026) for those who missed reporting their foreign assets in earlier years. Many returned NRIs/OCIs/Foreing Citizens/Students/Employees/Other Residents who missed reporting of foreign asset due to ignorance of law, can now get rid of past defaults consequences by opting this scheme.
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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.
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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.
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A. Many NRIs/OCIs do various investments in India (property purchase, mutual funds, FDR, shares, remittance of funds). Most of these transactions are reported to Inc Tax Deptt by respective financial intermediary/institute (i.e. Banks, Registrar of property, fund manager, company etc). In many cases, NRIs choose not to file ITR in India (considering that there is no tax payable or taxes are paid in form of TDS). Hence, Inc tax deptt neither get a due ITR nor they are aware that transaction belongs to a Non-resident. In the absence of complete facts, a doubt arises in the system about source of funds. Automated System generate query and investigation triggers. These investigations can be of different types i.e. Scrutiny Assessment, Enquiry Investigation, Summon. These notices need immediate and comprehensive response so that it gets closed at this level. Some matters are not closed here due to various reasons. In that case appeal can be filed with Appeallate Authorities (CIT Appeal, DRP, ITAT, Rectification Application etc). Various sections under which these enquiries trigger are section 142(1), 143(2), 148, 148A 133(6), 131, 144C, 143(3)/144/147 of Income Tax Act 1961. Under New Income Tax Act 2025, these sections are named as 268 (earlier 142), 270 (earlier 143) 271 (earlier 144), 275 (earlier 144C), 279 (earlier 147), 280 (earlier 148), 281 (earlier 148A), 246 (earlier 131), 252 (earlier 133).
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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
Yes. Rental income received in India can generally be repatriated abroad after paying applicable taxes and complying with RBI and Income Tax regulations. Proper banking and tax documentation must be maintained.
Under FEMA, ‘NRI’ means a person resident outside India who is a citizen of India. ‘PIO’ means a citizen of any country (except Bangladesh or Pakistan) who previously held an Indian passport, or whose parents/grandparents were Indian citizens, or who is a spouse of such a person. Definitions can vary across different FEMA regulations.
NRIs must file an ITR in India if their taxable income exceeds the prescribed threshold, or if they want to claim a refund of TDS. Filing obligations may also arise from property transactions, capital gains, or DTAA benefit claims.
You can authorise any person via a Power of Attorney to file your return. A copy of the Power of Attorney should be enclosed with the return.
You can file a belated or updated return for earlier assessment years subject to provisions of the Income Tax Act. If excess TDS was deducted in a prior year, a refund claim can be filed accordingly.
All income is classified under five heads:
(1) Income from Salary,
(2) Income from House Property,
(3) Income from Business or Profession,
(4) Income from Capital Gains, and
(5) Income from Other Sources.
Tax liability can be reduced by investing in approved schemes (e.g. ELSS, PPF, NPS) under Sections 80C, 80D etc., and by making donations to approved charitable institutions under Section 80G.
Dividends declared by Indian companies are not taxable in the hands of shareholders because the company already pays Dividend Distribution Tax (DDT) on distributed profits. (Note: post-FY 2020-21, DDT was abolished and dividends are now taxable in the hands of recipients — verify current rules with a CA.)
Taxes generally crystallise after the financial year ends, but the law requires advance tax payments during the year itself. Taxes may also be deducted via TDS or TCS. Any shortfall after accounting for advance tax, TDS, and TCS must be paid as Self Assessment Tax before filing the return.
NRIs/PIOs can open three types of accounts: (1) FCNR Account — held in foreign currency, freely repatriable; (2) NRE Account — Indian rupees, freely repatriable principal and interest; (3) NRO Account — Indian rupees, current income fully repatriable, capital remittance up to USD 1 million/year for bona fide purposes.
Yes, up to USD 250,000 (or equivalent) from a close relative abroad, provided: the minimum maturity is one year; the loan is interest-free; and the amount is received via inward remittance through normal banking channels or by debit to the NRE/FCNR(B) account of the NRI.
A. Residents of India are generally required to disclose foreign immovable properties and foreign bank accounts in their Income Tax Returns. Rental income earned from overseas properties may also be taxable in India subject to applicable DTAA provisions.
A. Yes. If excess TDS has been deducted on the sale of property, an NRI can claim a refund by filing an Income Tax Return in India. In many cases, obtaining a Lower TDS Certificate before the transaction can help avoid excessive tax deduction.
Ans: Income earned in India is not limited to income earned within the geographical limits or boundaries of the country. Certain incomes are also deemed to have been earned in India although they may have been earned outside the country.
Ans: No, The Income tax Act applies to all persons who earn income in India. Whether they are resident or non-resident.
Ans: If an individual stays in India for 182 days or more in a year, he is treated as resident in that year regardless of his citizenship. If the stay is less than 182 days he is a non-resident.
Ans: In case of resident individuals and companies, their global income is taxable in India. However non-residents have to pay tax only on the income earned in India or from a source/activity in India.
Ans: No. Receipts can be classified into two kinds. A) Revenue receipt B) Capital receipt. The general rule under the Income tax Act is that, all revenue receipt are taxable unless a receipt is specifically exempted and all capital receipts are exempt from taxation unless there is a provision to tax it. Gifts and loans etc are in the nature of capital receipts not attracting tax.
Ans: For every source of income you have to maintain proof of earning and the records specified under the IT Act. In case, no such records have been laid down, you should maintain reasonable level of records with which you can support the claim of income.
Ans: You must first register your PAN by logging into the online service called view tax credit in the NSDL website [http://www.tin-nsdl.com]. Thereafter your PAN registration must be authorized by visiting the nearest TIN [Tax Information Network] facilitation center of NSDL or getting their representative to call upon you. These are paid services.
Ans: For payments deposited by you into the bank you will have to contact your bankers if the credit has not been given even after three days. In case of TDS or TCS you will have to contact the concerned deductor /collector after the due date for filing the quarterly TDS/TCS return by them is over.
Ans: It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income is communicated to the Income tax department after the end of the Financial year. Different forms are prescribed for filing of returns for different Status and Nature of income.
Ans: A PAN number has been made compulsory for every transaction with the Income Tax department. It is also mandatory for numerous other financial transactions such as opening of bank accounts, availing institutional financial credits, purchase of high-end consumer item, foreign travel, transaction of immovable properties, dealing in securities etc. A PAN card is a valuable means of identification accepted by all government and non-government institutions in the country.
Ans: With your PAN you can continue to transact with the Income Tax department. However, in respect of other agencies you may encounter constraints without a PAN card since it doubles as a photo identity card.
Ans: You may retain any one of the numbers and surrender the other through a letter addressed to your jurisdictional Assessing Officer.
Ans: Yes. It is illegal to have two PANs and the penalty for such offence is Rs.10,000/-
Ans: It is advisable to retain only one PAN, preferably the one used for Income Tax purpose and surrender the other number immediately. The institutions where the latter number has been quoted should be informed of the correct PAN.
A. FEMA mandates main functions of RBI as:
• Control over dealings in foreign exchange by giving general or special permission for dealing in foreign exchange.
• Prior approval of RBI is required for certain current account transactions as provided in Foreign Exchange Management (Current Account Transactions) Rules, 2000. Restrictions on current account transactions be imposed by Central Government in consultation with RBI by making Rules.
• Prescribing conditions for capital account transactions.
• Make regulations for:
– Transfer or issue of foreign security to resident, and Indian security to non-resident
– Borrowing and lending in foreign exchange or to a foreign person
– Export/import of currency or currency notes
– Transfer of immovable property outside India
– Giving guarantee or surety where foreign exchange transaction is involved.
• Make regulations for realisation of foreign exchange due from export of goods and services.
• Make regulations for realisation, possession and repatriation of foreign currency or foreign coins, foreign currency accounts, foreign exchange acquired from employment, business, trade, services etc.
• Granting authorisation to ‘Authorised Person’ to deal in foreign exchange, and give directions; and To make any other Regulations.
A. As per section 2(v) of FEMA, Person resident in India means a person residing in India for more than 182 days during the course of the preceding financial year but does not include
(A) a person who has gone out of India or who stays outside India, in either case
• for or on taking up employment outside India, or
• for carrying on outside India a business or vocation outside India, or
• for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than
• for or on taking up employment in India, or
• for carrying on in India a business or vocation in India, or
• for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
To be treated as a person resident in India under FEMA, a person has not only to satisfy the
condition of the period of stay (being more than 182 days during the preceding financial year)
but has to also comply with the condition of the purpose/intention of stay.
As per section 2(w) of FEMA, Person resident outside India means a person who is not resident
in India.
A. As per Section 2(j) of FEMA, Current account transaction means a transaction other than a capital account transaction and without prejudice to the generality of the foregoing such transaction includes,
• Payments due in connection with foreign trade, other current business, services, and short-term
• banking and credit facilities in the ordinary course of business,
• Payments due as interest on loans and as net income from investments,
• Remittances for living expenses of parents, spouse and children residing abroad, and
• Expenses in connection with foreign travel, education and medical care of parents, spouse and children.
Further, as per Section 2(e) of FEMA, Capital Account Transaction means a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or assets or liabilities in India of persons resident outside India i.e.
• Transfer or issue of any foreign security by a person resident in India;
• Transfer or issue of any security by a person resident outside India;
• Transfer or issue of any security or foreign security by any branch, office or agency in India of a person resident outside India;
• Any borrowing or lending in foreign exchange in whatever form or by whatever name called;
• Any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India;
• Deposits between persons resident in India and persons resident outside India;
• Export, import or holding of currency or currency notes;
• Transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India;
• Acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India;
• Giving of a guarantee or surety in respect of any debt, obligation or other liability incurred
• by a person resident in India and owed to a person resident outside India; or
• by a person resident outside India
A. NRE accounts: NRE accounts should be redesignated as resident accounts or the funds held in these accounts may be transferred to the RFC accounts (if the account holder is eligible for maintaining RFC account) at the option of the account holder immediately upon the return of the account holder to India for taking up employment or for carrying on business or vocation or for any other purpose indicating intention to stay in India for an uncertain period. Where the account holder is only on a short visit to India, the account may continue to be treated as NRE account even during his stay in India.
FCNR(B) deposits: When an account holder becomes a person resident in India, deposits may be
allowed to continue till maturity at the contracted rate of interest, if so desired by him. However, except the provisions relating to rate of interest and reserve requirements as applicable to FCNR(B) deposits, for all other purposes such deposits shall be treated as resident deposits from the date of return of the account holder to India. Authorised dealers should convert the FCNR(B) deposits on maturity into resident rupee deposit accounts or RFC account (if the depositor is eligible to open RFC account), at the option of the account holder and interest on the new deposit (rupee account or RFC account) shall be payable at the relevant rates applicable for such deposits.
NRO accounts: NRO accounts may be re-designated as resident rupee accounts on the return to the
account holder to India for taking up employment, or for carrying on business or vocation or for any other purpose indicating his intention to stay in India for an uncertain period. Where the account holder is only on a temporary visit to India, the account should continue to be treated as non-resident during such visit.
A. Yes, an individual resident can lend money by way of crossed cheque /electronic transfer within the overall limit of USD 200,000 per financial year under the Liberalised Remittance Scheme, to meet the borrower’s personal or business requirements in India, subject to conditions. The loan should be interest free and have a maturity of minimum one year and cannot be remitted outside India.
A. Yes, where an authorised dealer in India has granted loan to a non-resident Indian such loans may also be repaid by resident close relative (relative as defined in Section 6 of the Companies Act, 1956), of the Non-Resident Indian by crediting the borrowers loan account through the bank account of such relative.
A. FDI means investment by non-resident entity/person resident outside India in the capital of the Indian company under Schedule 1 of FEMA 20.