Know These Tax Implications Before Moving to India as an NRI

 If you are an NRI planning to relocate to India, there are various financial laws and regulatory challenges that you will face if you have not carefully planned your transition. The major concern that NRIs have regarding their finances is the tax laws. NRI returning to India tax implications can be problematic, and you might incur penalties if you are not careful.

Do not worry. In the following blog post, we are going to explain all the things you should know to seamlessly transition all your finances to India from a foreign country.

Regulatory Bodies

There are two main regulatory bodies in India that you must familiarise yourself with as an NRI: Foreign Exchange Management Act (FEMA) and the Indian Income Tax Act (ITA). FEMA tracks and monitors where you can invest. ITA regulates how all of your investments will be taxed.

Residential Status

It is very important that you are aware of your current residential status. Failing to do so will get you in trouble with the ITA. You will either need to be classified as Resident (R), Resident but Not-ordinarily Resident (RNOR), or a Non-Resident (NR).

Tax Liabilities

If you are a “Resident”, then your foreign earnings will be taxable in India. If you are an “RNOR” or a “NR”, then only the income that you have earned in India will be taxable. However, we advise an NRI returning to India to avail consultancy services to better understand your tax liabilities.

Tax Benefits

There are several tax benefits that NRIs can enjoy in India. If you are an RNOR, all your overseas income can be claimed as exempt from income tax. These include capital gains, rent from properties, pension schemes, and much more.

Bank Accounts

After settling in India, you have to decide if you want to maintain your overseas accounts or want them closed. NRIs are only allowed to maintain a Non-Resident External (NRE) account, Non-Resident Ordinary (NRO) account, and Foreign Currency Non-Resident (FCNR) account.

Conclusion

The easiest and stress-free way to manage and transition your finances as an NRI moving to India is to hire a financial advisor company in India. You can contact Ashutosh Financial Services Pvt Ltd, which has more than 65 years of experience in this industry.