Introduction
Welcome to our comprehensive NRI Q&A session, where we dive deep into the intricacies of taxation and property sale matters. As promised, we are here to provide you with simple, straightforward, and practical answers to your burning questions. In each session, we select five to six questions that cover a wide range of topics, ensuring we address the most pressing concerns of our NRI community. So, let’s embark on this informative journey together!
Why read when you can watch the video?
Transferring Rental Income from NRO to NRE
Question from Mr. Ratnakar Rao: How can rental income from NRO be transferred to NRE?
Answer – When it comes to transferring rental income from NRO (Non-Residential Ordinary) to NRE (Non-Residential External) accounts, the process is surprisingly simple. To initiate the transfer, you can opt for a 15 CACB form, obtainable through a Charted Accountant (CA) or by seeking assistance from our expert team. We will assess your tax situation and ensure all filings are in order. If you have no tax liabilities, submitting the 15 CACB form to your bank will facilitate a seamless transfer of funds from your NRO account to your NRE account. Rest assured, the process is designed to be hassle-free.
Consult CA Arun Tiwari for more information at 📞 8080088288 or cs@aktassociates.com
Jointly Owned Property Sales and NRE/NRO Accounts
Question from Mr. Shane Ferdz: If the property is jointly owned, should the NRE/NRO accounts be joined, or should the funds be split equally or paid separately?
Answer – It is common for NRIs to include their spouse’s name in jointly owned properties. However, the question arises as to whether a joint account is necessary for NRE/NRO transactions. The answer is no. You have two viable options: either maintain separate NRO accounts, which we highly recommend or have the spouse provide a written directive to pay all funds into the husband’s account. While the latter approach is acceptable, it is ideal for each individual to have their own NRO account. This ensures that Indian income is transferred to the NRO account rather than the NRE account, as NRIs are required to do. Converting a savings account into an NRO account is a relatively straightforward process. By opting for separate NRO accounts for joint property owners, you can streamline transactions and avoid unnecessary income tax notices or queries.
Tax Implications in the USA for Selling Property in India
Question from Mr. Amit Sharma: Do we need to pay taxes in the USA when transferring the proceeds from selling a property in India?
Answer – Indeed, selling a property in India and transferring the proceeds to the USA can have tax implications. However, the specifics can vary depending on various factors. In most cases, a double tax avoidance agreement or tax credit system is in place to prevent double taxation. To gain a precise understanding of your situation, we strongly advise consulting a U.S. legal counsel or tax consultant who specializes in such matters. While exemptions or tax credits often apply, it is important to note that if the tax rate in the USA is higher than that in India, you may be required to pay the difference. Seeking professional guidance will ensure you navigate this complex terrain with confidence.
Selling Property as an RNOR and Tax Compliance
Question from Shiva Prasada: Can I sell the property as an RNOR (Resident but Not Ordinarily Resident)? What are the implications?
Answer – The question pertains to whether an Aadhaar card and PAN card with a local address can be used to sell the property as an RNOR. Firstly, it’s important to understand that misdeclaration of your residential status can have severe consequences. Income tax authorities can initiate investigations or proceedings for up to 16 years in the case of non-residents. Waiting for 45 days to apply for lower Tax Deducted at Source (TDS) is a more prudent approach than risking a 16-year investigation. Passport details, visa information, and other interlinked data can be accessed by the authorities, making misdeclaration a risky proposition. Furthermore, misrepresenting your status can also lead to legal repercussions from the buyer. It is essential to prioritize compliance and seek professional advice from tax consultants or legal experts to ensure a smooth and legally sound property sale process.
Conclusion
In conclusion, it is crucial to respect and comply with tax authorities in all countries. Attempting to bypass or misrepresent your residential status can lead to significant problems. Compliance is always simpler and less burdensome than dealing with the consequences of non-compliance. Proper planning, such as waiting for 45 days to apply for lower TDS, can save you from prolonged investigations and legal complications. Always remember that compliance is the wise choice when it comes to tax-related matters. If you have further questions or queries, please feel free to reach out to us. We are here to assist you.
Thank you for reading this informative article. Stay tuned for more insightful videos and valuable information in our upcoming sessions. Have a fantastic day!