Praveen Saanker

FEMA - Rules

The Foreign Exchange Management Act, 1999 (FEMA) came into force with effect from June 1, 2000. With the introduction of the new Act in place of FERA, certain structural changes were brought in. The Act consolidates and amends the law relating to foreign exchange to facilitate external trade and payments, and to promote the orderly development and maintenance of foreign exchange in India.

From the NRI perspective, FEMA broadly covers all matters related to foreign exchange, investment avenues for NRIs such as immovable property, bank deposits, government bonds, investment in shares, units and other securities, and foreign direct investment in India.

FEMA vests with the Reserve Bank of India, the sole authority to grant general or special permission for all foreign exchange related activities mentioned above.

Section 2 - The Act here provides clarity on several definitions and terms used in the context of foreign exchange. Starting with the identification of the Non-resident Indian and Persons of Indian origin, it defines "foreign exchange" and "foreign security" in sections 2(n) and 2(o) respectively of the Act. It describes at length the foreign exchange facilities and where one can buy foreign exchange in India. FEMA defines an authorised dealer, and addresses the permissible exchange allowed for a business trip, for studies and medical treatment abroad, forex for foreign travel, the use of an international credit card, and remittance facility

Section 3 prohibits dealings in foreign exchange except through an authorised person. Similarly, without the prior approval of the RBI, no person can make any payment to any person resident outside India in any manner other than that prescribed by it. The Act restricts non-authorised persons from entering into any financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire any asset outside India.

Section 4 restrains any person resident in India from acquiring, holding, owning, possessing or transferring any foreign exchange, foreign security or any immovable property situated outside India except as specifically provided in the Act.

Section 6 deals with capital account transactions. This section allows a person to draw or sell foreign exchange from or to an authorised person for a capital account transaction. RBI in consultation with the Central Government has issued various regulations on capital account transactions in terms of sub-sect ion (2) and (3) of section 6.

Section 7 covers the export of goods and services. All exporters are required to furnish to the RBI or any other authority, a declaration regarding full export value.

Section 8 puts the responsibility of repatriation on the persons resident in India who have any amount of foreign exchange due or accrued in their favour to get the same realised and repatriated to India within the specific period and in the manner specified by the RBI.

 The duties and liabilities of the Authorised Dealers have been dealt with in Sections 10, 11 and 12, while Sections 13 to 15 cover penalties and enforcement of the orders of the Adjudicating Authority as well as the power to compound contraventions under the Act.

Sections 36 and 37 deal with the establishment of an Enforcement Directorate, and empowers it to investigate the violation of any provisions of the Act, rules, regulations, notifications, directions or order issued under this Act.

Categories:

Financial management, asset management, investment banking, investment management, portfolio management, financial planner, personal banking, private bank, private banking, what is private banking, what is wealth management, wealth management,  private banks, about wealth management, fund management, investment companies, financial advisor, asset management company,  banking management,  asset managers, certified financial planner, financial advisors, wealth creation, investment in, investments in, direct investment, capital investment, investment in company,Wealth management, investments in India, taxes in india, direct investment in india,Investment in business, investment in companies, wealth in india, financial advisors, direct investments,portfolio investment, investment and finance, capital investments, family office, foreign companies in india, foreign investments in india,  foreign company in india, the family office,  what is family office, capital investors,  investment in assets,  fdi investments in india, portfolio investments,  investments in property, Praveen Saanker, Praveen saanker, Praveen

 

NRI Banking - Accounts

Repatriable Accounts

Funds that can be transferred or repatriated abroad are maintained in a Non Resident External Bank account. Generally, funds remitted from outside India are credited to this account. Investments made from foreign funds can be repatriated overseas, and such investments are maintained in a Repatriable Demat account.

Non-Resident (External) Rupee (NRE) Accounts

ü  Both Principal and Interest can be repatriated or transferred out of India

ü  Savings rate on NRE accounts is at par with savings rates in resident accounts

ü  Term deposits can be made for 1 to 3 years.

ü  The interest rates on (NRE) Term deposits cannot be higher than LIBOR/SWAP rates as on the last working day of the previous month, for US dollar of corresponding maturity plus 50 basis points.

ü  The interest rates on three year deposits also apply in case the maturity period exceeds three years. The change in interest rate also applies to NRE deposits renewed after their present maturity period.

FCNR (B) Accounts

ü  As in NRE accounts, both principal  and interest are repatriable.

ü  Presently, deposits can be made in 6 specific foreign currencies (US Dollar, Pound Sterling, EURO, Japanese Yen, Australian Dollar and Canadian Dollar).

ü  Interest rate- Fixed or floating within the limits of LIBOR/SWAP rates for the respective currency/corresponding term minus 25 basis points (except Japanese Yen).

ü  The term of deposits can range between 1 to5 years.

NRO Accounts

ü  Only current earnings are repatriable.

ü  Savings NRO accounts are normally operated to credit rupee income from shares, interest, rent from property in India, etc.

ü  In case of term deposits, banks are allowed to determine their own interest rates.

ü  Banks can allow remittance upto USD 1 million per financial year for bonafide purposes from balances in the NRO accounts once taxes are paid out. This limit includes the sale proceeds of immovable properties held by NRIs and PIOs.

Resident Foreign Currency (RFC) Account

NRIs and PIOs returning to India can maintain  an RFC account with an authorized bank in India to transfer funds from their NRE/FCNR (B) accounts. Proceeds of assets held outside India before their return to India can be credited to the RFC account. These funds are free from all restrictions as to their utilization or in investment in any form outside India.

Non-Repatriable Accounts

Non-repatriable funds are those which cannot be taken out of India. These have to be maintained in a separate bank account i.e. a Non Resident Ordinary Bank account.
Investments made from non-repatriable accounts cannot be repatriated but have to be  maintained in a Non-Repatriable Demat account. Money once transferred from an NRE account to an NRO account cannot be transferred back to an NRE account.

Non Resident Ordinary (NRO) Account

ü  When a resident becomes an NRI, his existing savings account is designated as a Non-resident Rupee (NRO) account.

ü  The NRO accounts could be maintained in the nature of current, saving, recurring or term deposits. NRIs can also open NRO accounts for depositing their funds from local transactions.

ü  The interest earned from NRO accounts is accountable to tax laws.

ü  NRO accounts can be opened in the name of NRIs who have left India to take up employment or business temporarily or permanently in a foreign country.

ü  Funds from NRO accounts are not repatriable or transferred to NRE accounts without the prior approval of the RBI.

ü  However, NRIs, PIOs, Foreign Nationals, retired employees or non-resident widows of Indian citizens can remit, through the Authorised Dealer, up to USD one million per calendar year from the NRO account or from income from sale of assets in India.

 

IMD forecasts ‘normal’ rain fall

 

India Meteorological Department’s (IMD) first official long-range forecast predicts a normal South-West (SW) monsoon (June-September) for the country in 2011. This is the first of the two-stage forecast that IMD releases for SW monsoon; a detailed update will follow in June, presenting breakdown of seasonal rainfall over four geographical regions.

 However, in the past, there have been several instances of large deviations between IMD’s projected and actual rainfall.

US Fed remains accomodative

 

Fed has maintained an accommodative stance in its monetary policy, given its view that:

(1) the pace of economic recovery is moderate;

 (2) rising headline inflation is transitory;

 (3) core inflation is subdued;

(4) inflation expectation is anchored.

Going forward, QE3 is unlikely, given that current macroeconomic backdrop is relatively better than the one prevailing during August 2010 when Fed first hinted at QE2. However, I do expect re-investment of treasuries will continue beyond June.

Budget promises to again go unfulfilled...

The Finance Minister's Union Budget-2011 was received with gaiety. The budget promised several things which would all lead to better economic growth for the country. A big promise that was made was to bring down the country's fiscal deficit to 4.6% of GDP from the 2010 level of 5.1%. And another was to provide all support so that the economic growth continues at the higher trajectory.

 However, as time has progressed, the key promises of the Union Budget 2011 appear to be getting challenged. The reason- higher crude oil prices. Since the budget was announced in February this year, crude oil prices have increased substantially. In fact, crude oil has touched US$ 125 per barrel. This is way higher than the Budget estimate of US$ 95 per barrel. This has put substantial pressure on the Government's fuel subsidy bill particularly with respect to diesel which forms nearly 60% of the total fuel subsidy.

 As a result, the government has come under pressure to increase the prices of diesel. If it decides to follow this path, then it adds to the risk of higher inflation. The inflation would be compounded in the event of a failure in monsoons or any other global turmoil that leads to higher commodity prices. In addition, diesel pricing is a sensitive issue for electoral votes.

 Therefore, the government now stands on crossroads. If it decides to take the path of increasing diesel prices, it risks higher inflation. This would lead to further pressures in the economy in the form of higher interest rates as well as slowing economic growth. If it decides to do nothing and allow diesel prices to remain where they are, then it risks a higher subsidy bill. This would lead to a burgeoning fiscal deficit. In either case, the promises made in the Union Budget appear to be in danger of remaining on paper. However, it is important to remember that reading too much into short-term economic forecasts can be very risky for investment decisions.

Source:- Equity Master

RBI's FY12 monetary policy

1. RBI raises short term LAF rates and savings bank rate by 50bp
2. Operating procedure changed, a new borrowing facility (MSF) at 100bp higher than repo
3. FY12 growth seen at 8% while Mar-12 inflation at 6% with upward bias
4. Expect 50bp+ increase in the entire interest rate structure and further 50bp hike in policy rates in 1HFY11
5. Expect savings deposit rate hike to be passed on
6. Tighter provisioning norms to have marginal impact as banks are carrying excess provisions

Gold ETF's...What now ???

 

Gold has seen its prices touch new highs. And along with it the gold Exchange Traded Funds (ETFs) have also seen their prices spiraling upwards. But the rise in prices of the latter has become a cause of concern for all. A large part of the price increase in ETFs is due to the huge amounts invested in them by the hedge funds. And these hedge funds tend to book profits when their targets are realized. Whenever this would happen, it would lead a decline in the prices of these ETFs. The worrisome factor is that the pricing of these ETFs is linked to the pricing of gold. Experts around the world, including IMF (International Monetary Fund) are concerned that any exodus of funds from the ETFs would lead to a decline in the prices of gold. However, the fund houses that have la unched these commodity based ETF s have stated that they do have adequate mechanisms in place to prevent this from happening. Even commodity experts feel that any decline in ETF prices would not lead to a decline in gold prices. It is actually the other way round.

Courtesy: Equity Master

 

Acquisition and Transfer of Immovable Property in India by a person resident outside India (RBI Circular as on April 8th 2011)

Introduction

Acquisition of immovable property in India by persons resident outside India (foreign national) is regulated in terms of section 6 (3) (i) of the Foreign Exchange Management Act (FEMA), 1999 as well as by the regulations contained in the Notification No. FEMA 21/2000-RB dated May 3, 2000, as amended from time to time. Section 2 (v) and Section 2 (w) of FEMA, 1999 defines `person resident in India' and a `person resident outside India', respectively. Person resident outside India is categorized as Non- Resident Indian (NRI) or a foreign national of Indian Origin (PIO) or a foreign national of non-Indian origin. The Reserve Bank does not determine the residential status. Under FEMA, residential status is determined by operation of law. The onus is on an individual to prove his / her residential status, if questioned by any authority.s

A person resident in India who is not a citizen of India is also covered by the relevant Notifications.  

2.   In terms of the provisions of Section 6(5) of FEMA 1999, a person resident outside India can hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was a resident in India or inherited from a person who was a resident in India.

3.   The regulations under Notification No. FEMA 21/2000-RB dated May 3, 2000, as amended from time to time, permit a NRI or a PIO to acquire immovable property in India, other than agricultural land or, plantation property or farm house. Further, foreign companies who have been permitted to open a Branch or Project Office in India are also allowed to acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. Such dispensation is however not available to entities which are permitted to open liaison offices in India.

4.    The restrictions on acquiring immovable property in India by a person resident outside India would not apply where the immovable property is proposed to be acquired by way of a lease for a period not exceeding 5 years or where a person is deemed to be resident in India.

In order to be deemed to be a person resident in India, from FEMA angle, the person would need to comply with the provisions of Section 2(v) of FEMA 1999. The Press Release dated February 1, 2009 issued by Government of India in this regard is enclosed as Annex.

Note: Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan cannot acquire or transfer immovable property in India, (other than on lease not exceeding five years) without the prior permission of the Reserve Bank.

5.  NRIs/ PIOs are allowed to repatriate an amount up to USD one million, per financial year (April-March), out of the balances held in the Non-Resident (Ordinary) Rupee (NRO) account, subject to compliance with applicable tax requirements. This amount includes sale proceeds of assets acquired by way of inheritance or settlement.

6. The FAQs cover the following topics :

A. Acquisition of Immovable Property in India by a person resident outside India, i.e., by a NRI / PIO / foreign national of non-Indian origin by way of purchase / gift / inheritance.

B. Transfer of immovable property in India by a person resident outside India by way of

     i) sale
     ii) gift
     iii) mortgage

C. Mode of payment for purchase of immovable property in India.

D. Repatriation of sale proceeds of residential / commercial property, in India, outside India acquired by NRI / PIO by way of

     i)  purchased
     ii) gift
     iii) inheritance

E. Provisions for Foreign Embassies / Diplomats / Consulates General

F. Other Aspects.

---

A.   Acquisition of Immovable Property in India through
purchase / gift/ inheritance

Q.1.  Who can purchase immovable property in India?

Ans. Under the general permission available, the following categories can purchase immovable property in India:

i) Non-Resident Indian (NRI)¹
ii)  Person of Indian Origin (PIO)²
 
The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land / plantation property / farm house in India.

Q.2.  Can NRI/PIO acquire agricultural land/ plantation property / farm house in India?

Ans. No.

Q.3.  Are any documents required to be filed with the Reserve Bank after the purchase?

Ans. No.  An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank.

Q.4. How many residential / commercial properties can NRI / PIO purchase under the general permission?

Ans. There are no restrictions on the number of residential / commercial properties that can be purchased.

Q.5. Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?

Ans. No.

Q.6. Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?

Ans. No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. However, he / she can acquire or transfer immovable property in India, on lease, not exceeding five years. In such cases, there is no requirement of taking any permission of /or reporting to the Reserve Bank.

Q.7. Can a foreign national who is a person resident in India purchase immovable property in India?

Ans.  Yes, a foreign national who is a ‘person resident in India’ within the meaning of Section 2(v) of FEMA, 1999 can purchaseimmovable property in India,but the person concerned would have to obtain the approvals and fulfil the requirements, if any, prescribed by other authorities, such as, the State Government concerned, etc. The onus to prove his/her residential status is on the individual as per the extant FEMA provisions, if required by any authority. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank.

Q.8. Can the branch / liaison office of a foreign company purchase immovable property in India?

Ans. A foreign company which has established a Branch Office or other place of business in India, in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through the proper banking channels. A declaration in form IPI should be filed with the Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for the purpose of borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of the Reserve Bank. Further, acquisition of immovable property by entities incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan and who have set up Branch Offices in India and would require prior approval of the Reserve Bank.

However, if the foreign company has established a Liaison Office in India, it cannot acquire immovable property. In such cases, Liaison Offices can acquire property by way of lease not exceeding 5 years.

Q.9. Can a NRI/PIO acquire immovable property in India by way of gift? Can a foreign national acquire immovable property in India by way of gift?

Ans. (a)  Yes, NRIs and  PIOs can freely acquire immovable property by way of gift either from

i) a person resident in India; or
ii) an NRI;  or
iii) a PIO.

However, the property can only be commercial or residential in nature. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift.

(b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.

Q.10. Can a non-resident inherit immovable property in India?

Ans. Yes, a person resident outside India i.e. i) an NRI; ii) a PIO;  and iii) a foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India. However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek prior approval of the Reserve Bank for inheriting immovable property in India.

Q.11. From whom can a non-resident person inherit immovable property?

Ans.  A person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) can inherit immovable property from

(a) a person resident in India
(b) a person resident outside India

However, the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange law in force or FEMA regulations, applicable at the time of acquisition of the property.

B. Transfer of immovable property in India

(i) Transfer by way of sale

Q.12. Can an NRI/ PIO/foreign national sell his residential / commercial property?

Ans. (a)  NRI can sell property in India to

i)   a person resident in India; or
ii)  an NRI; or
iii) a PIO.

(b) PIO can sell property in India to

i)   a person resident in India; or
ii)   an NRI; or
iii)  a PIO –  with the  prior approval of the Reserve Bank

(c) Foreign national of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan can sell property in India with prior approval of the Reserve Bank to

i)  a person resident in India
ii) an NRI
iii) a PIO

Q.13. Can a non-resident owning / holding an agricultural land / a plantation property / a farm house in India sell the said property?

Ans. (a) NRI / PIO may sell agricultural land /plantation property/farm house to a person resident in India who is a citizen of India.

(b)  Foreign national of non-Indian origin resident outside India would need prior approval of the Reserve Bank to sell agricultural land/plantation property/ farm house in India.

(ii) Transfer by way of gift

Q.14. Can a non-resident gift his residential / commercial property?

Ans.  Yes.
(a) NRI / PIO may gift residential / commercial property to –
(i) person resident in India or
(ii) an NRI or
(iii) PIO.

(b)  A foreign national of non-Indian origin requires the prior approval of the Reserve Bank for gifting the residential / commercial property.

Q.15. Can an NRI / PIO / foreign national holding an agricultural land / a plantation property / a farm house in India, gift the same?

Ans.  (a) NRI / PIO can gift an agricultural land / a plantation property / a farm house in India only to a person resident in India who is a citizen of India.

(b) A foreign national of non-Indian origin would require the prior approval of the Reserve Bank to gift an agricultural land / a plantation property / a farm house in India.

(iii) Transfer through mortgage

Q.16. Can residential / commercial property be mortgaged by NRI/ PIO?

Ans. i) NRI / PIO can mortgage a residential / commercial property to:

(a) an Authorised Dealer / the housing finance institution in India without the approval of Reserve Bank

(b) a bank abroad, with the prior approval of the Reserve Bank.

ii) A foreign national of non-Indian origin can mortgage a residential / commercial property only with prior approval of the Reserve Bank.

iii) A foreign company which has established a Branch Office or other place of business in accordance with FERA/FEMA regulations has general permission to mortgage the property with an Authorised Dealer in India.

C.   Mode of payment for purchase of immovable property in India.

Q.17. How can an NRI / PIO make payment for purchase of residential / commercial property in India?

Ans.  Payment can be made by NRI / PIO out of:

(a) funds remitted to India through normal banking channels or
(b) funds held in NRE / FCNR (B) / NRO account  maintained in India

No payment can be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.

Q.18 Is repatriation of application money for booking of flat / payment made to the builder by NRI/ PIO allowed when the flat or plot is not allotted or the booking / contract is cancelled?

Ans. The Authorised Dealers can allow NRIs / PIOs to creditrefund of application/ earnest money/ purchase consideration made by the house building agencies/ seller on account of non-allotment of flat/ plot/ cancellation of bookings/ deals for purchase of residential, commercial property, together with interest, if any, net of income tax payable thereon, to NRE/FCNR account, provided, the original payment was made out of NRE/FCNR account of the account holder or remittance from outside India through normal banking channels and the Authorised Dealer is satisfied about the genuineness of the transaction.

Q.19.  Can NRI / PIO avail of loan from an authorised dealer for acquiring flat / house in India for his own residential use against the security of funds held in his NRE Fixed Deposit account / FCNR (B) account? How the loan can be repaid?

Ans. Yes, such loans are permitted subject to the terms and conditions laid down in Schedules 1 and 2 to the Notification No. FEMA 5/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time. Banks cannot grant fresh loans or renew existing loans in excess of Rs. 100 lakhs against NRE and FCNR (B) deposits, either to the depositors or to third parties. The banks should also not undertake artificial slicing of the loan amount to circumvent the ceiling of Rs. 100 lakh.

Such loans can be repaid in the following manner :

(a) by way of inward remittance through normal banking channel or
(b) by debit to the NRE / FCNR (B) / NRO account of the NRI/ PIO or
(c) out of rental income from such property
(d) by the borrower's close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the  borrower's loan account.

Q.20. Can NRI / PIO, avail of housing loan in Rupees from an Authorised Dealer or a Housing Finance Institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation ? How can such loan be repaid?

Ans. Yes, NRI/PIO can avail of housing loan in Rupees from an Authorised Dealer or a Housing Finance Institution subject to certain terms and conditions laid down in Regulation 8 of Notification No. FEMA 4/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Borrowing and lending in rupees) Regulations, 2000, as amended from time to time. Authorised Dealers/ Housing Finance Institutions can also lend to the NRIs/ PIOs for the purpose of repairs/renovation/ improvement of residential accommodation owned by them in India. Such a loan can be repaid (a) by way of inward remittance through normal banking channel or (b) by debit to the NRE / FCNR (B) / NRO account of the NRI / PIO or (c) out of rental income from such property; or (d) by the borrower's close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower's loan account.

Q.21. Can NRI/PIO avail of housing loan in Rupees from his employer in India?

Ans. Yes, subject to certain terms and conditions given in Regulation 8A of Notification No. FEMA 4/2000-RB dated May 3, 2000 and A.P. (DIR Series) Circular No.27 dated October 10, 2003, i.e.,

(i) The loan shall be granted only for personal purposes including purchase of housing property in India;

(ii) The loan shall be granted in accordance with the lender’s Staff Welfare Scheme/Staff Housing Loan Scheme and subject to other terms and conditions applicable to its staff resident in India;

(iii) The lender shall ensure that the loan amount is not used for the purposes specified in sub-clauses (i) to (iv) of clause (1) and in clause (2) of Regulation 6 of Notification No.FEMA.4/2000-RB dated May 3, 2000.

(iv) The lender shall credit the loan amount to the borrower’s NRO account in India or shall ensure credit to such account by specific indication on the payment instrument;

(v) The loan agreement shall specify that the repayment of loan shall be by way of remittance from outside India or by debit to NRE/NRO/FCNR Account of the borrower and the lender shall not accept repayment by any other means.

D. Repatriation of sale proceeds of residential / commercial property
purchased by NRI / PIO

Q.22. Can NRI / PIO repatriate outside India the sale proceeds of immovable property held in India?

Ans.  
(a) In the event of sale of immovable property other than agricultural land / farm house / plantation property in India by a NRI / PIO, the Authorised Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely:

(i) the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations;

(ii) the amount to be repatriated does not exceed:

• the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels, or
• the amount paid  out of funds held in Foreign Currency Non-Resident Account,  or
• the foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; and

(iii) in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

For this purpose, repatriation outside India means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency.

(b) in case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India (as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account.

NRI/PIO are also allowed by the Authorised Dealers to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account / sale proceeds of assets by way of purchase / the assets in India acquired by him by way of inheritance / legacy. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance.  Remittances exceeding US $ 1,000,000 (US Dollar One million only) in any financial year requires prior permission of the Reserve Bank.

(c) A person referred to in sub-section (5) of Section 6 of the Foreign Exchange Management Act³ ,  or his successor shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section.

Q.23. Can an NRI/PIO repatriate the proceeds in case the sale proceeds were deposited in the NRO account?

Ans. Please refer to the answer at Q.22 above. NRI/PIO may repatriate up to USD one million per financial year (April-March) from their NRO account which would also include the sale proceeds of immovable property. There is no lock in period for sale of immovable property and repatriation of sale proceeds outside India.

Q.24. If a Rupee loan was taken by the NRI/ PIO from an Authorised Dealer or a Housing Finance Institution for purchase of residential property can the NRI / PIO repatriate the sale proceeds of such property?

Ans. Yes, Authorised Dealers have been authorised to allow repatriation of sale proceeds of residential accommodation purchased by NRIs/ PIOs out of funds raised by them by way of loans from the authorised dealers/ housing finance institutions to the extent such loan/s repaid by them are out of the foreign inward remittances received through normal banking channel or by debit to their NRE/FCNR accounts. The balance amount, if any, can be credited to their NRO account and the NRI/PIO may repatriate up to USD one million per financial year (April-March) subject to payment of applicable taxes from their NRO account balances which would also include the sale proceeds of the immovable property.

Q.25. If the immovable property was acquired by way of gift by the NRI/PIO, can he repatriate abroad the funds from sale of such property?

Ans. The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes.  

Q.26. If the immovable property was received as inheritance by the NRI/PIO can he repatriate the sale proceeds?

Ans. Yes, general permission is available to the NRIs/PIO to repatriate the sale proceeds of the immovable property inherited from a person resident in India subject to the following conditions:

(i) The amount should not exceed USD one million, per financial year (ii) This is subject to production of documentary evidence in support of acquisition / inheritance of assets and an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.4/2009 dated June 29, 2009 (iii) In cases of deed of settlement made by either of his parents or a close relative (as defined in section 6 of the Companies Act, 1956) and the settlement taking effect on the death of the settler (iv) the original deed of settlement and  a tax clearance / No Objection Certificate from the Income-Tax Authority should be produced  for the remittance  (v) Where the remittance as above is made in more than one installment, the remittance of all such installments shall be made through the same Authorised Dealer (vi) In case of a foreign national, sale proceeds can be repatriated if the property is inherited from a person resident outside India with the prior approval of the Reserve Bank. The foreign national has to approach the Reserve Bank with documentary evidence in support of inheritance of the immovable property and the undertaking and the C.A. Certificate mentioned above.

The general permission for repatriation of sale proceeds of immovable property is not available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan and Iran and he has to seek specific approval of the Reserve Bank.

As FEMA, 1999 specifically permits transactions only in Indian Rupees with citizens of Nepal and Bhutan. Therefore, the question of repatriation of the sale proceeds in foreign exchange to Nepal and Bhutan would not arise.   

E. Provisions for Foreign Embassies / Diplomats / Consulates General

Q.27. Can Foreign Embassies / Diplomats / Consulates General purchase / sell immovable property in India?

Ans. In terms of Regulation 5A of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2000, Foreign Embassies/  Diplomats/ Consulates General, may purchase/ sell immovable property (other than agricultural land/ plantation property/ farm house) in India provided –

(i) Clearance from the Government of India, Ministry of External Affairs has been obtained for such purchase/sale; and

(ii) The consideration for acquisition of immovable property in India is paid out of funds remitted from abroad through the normal banking channels.

F. Other Aspects

Q.28. Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds?

Ans. Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.

Q.29. Can a person who had bought immovable property, when he was a resident, continue to hold such property even after becoming an NRI/PIO?

Ans. Yes, a person who had bought the residential / commercial property / agricultural land/ plantation property / farm house in India when he was a resident, continue to hold the immovable property without the approval of the Reserve Bank even after becoming an NRI/PIO.

Q. 30. In which account can the sale proceeds of such immovable property be credited ?

Ans. The sale proceeds may be credited to NRO account of the NRI /PIO.

Q.31. Can the sale proceeds of the immovable property referred to in Q.No. 29 be remitted abroad ?

Ans. Yes, From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes.  

Q.32. Can foreign nationals of non-Indian origin resident in India or outside India who had earlier acquired immovable property under FERA with specific approval of the Reserve Bank continue to hold the same?  Can they transfer such property?

Ans. Yes, they may continue to hold the immovable property under holding license obtained from the Reserve Bank. However, they can transfer the property only with the prior approval of the Reserve Bank.

Q.33. Is a resident in India governed by the provisions of the Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations, 2000?

Ans. A person resident in India who is a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan is governed by the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000, as amended from time to time, i.e. she/he would require prior approval of the Reserve Bank for acquisition and transfer of immovable property in India even though she/he is resident in India. Such requests are considered by the Reserve Bank in consultation with the Government in India.

The citizens of countries other than those listed above can be PIOs who are covered under the general permission (please refer to Q.No.1). The provisions relating to foreign national of non-Indian origin are covered in detail in Q Nos. 6 and 7.

Categories:

Financial management, asset management, investment banking, investment management, portfolio management, financial planner, personal banking, private bank, private banking, what is private banking, what is wealth management, wealth management,  private banks, about wealth management, fund management, investment companies, financial advisor, asset management company,  banking management,  asset managers, certified financial planner, financial advisors, wealth creation, investment in, investments in, direct investment, capital investment, investment in company,Wealth management, investments in India, taxes in india, direct investment in india,Investment in business, investment in companies, wealth in india, financial advisors, direct investments,portfolio investment, investment and finance, capital investments, family office, foreign companies in india, foreign investments in india,  foreign company in india, the family office,  what is family office, capital investors,  investment in assets,  fdi investments in india, portfolio investments,  investments in property, Praveen Saanker, Praveen saanker, Praveen

 

This Akshaya Tritiya buy gold in other forms

Akshaya Tritiya is traditionally considered auspicious for buying gold, especially in the form of coins and bars. Investors believe that buying gold on the day brings prosperity for the rest of the year. If, this Akshaya Tritiya on May 6, you plan to buy gold purely as an investment, then you have some options other than buying physical gold. But before that, you would like to know about the economics of gold in the current scenario. 

WHY GOLD PRICES ARE RISING 

There is an eternal debate raging on the outlook of gold prices. "There are several factors providing a strong support to the gold's price," says Richa Karpe, director (investments), Altamount Capital. "First, hot money is chasing commodities, pushing up the prices of gold, silver and other commodities," Karpe says. "Also, major global economies such as the US, Japan, UK and Europe are battling crises, leaving investors perplexed regarding the choice of safe investment options." Whenever an economy encounters a big crisis, investors tend to rush towards gold as a stable investment option. 

As a result, the yellow metal has attracted several new investors who are buying gold at the current price levels. "Indians and Chinese have been traditional investors in gold. But investors from Western countries didn't have any exposure in gold. Now, several family offices have advised their international clientele to have 5-10 % of the entire financial portfolio to be invested in gold," says Karpe. 

INVESTMENT OPTIONS IN GOLD 

On Akshaya Tritiya, take a look at options other than physical gold sold by jewellers and banks in the form of gold coins and bars. If you must, then buy only a small quantity just as a token, because gold coins come with some disadvantages. First, you have to incur an additional cost on storage. You may consider keeping it in a bank locker . 

But banks encourage locker accounts only if some token amount, mostly in the form of a fixed deposit, is parked with the them. Besides, you will incur a recurring expense to maintain that locker. Secondly, although coins and bars enjoy some liquidity, you will still be at the jeweller's mercy to get the right value. When it comes to coins, even banks may not be a good option. Banks do sell 24-carat gold coins with an assaying certificate, but the coins cost 7-8 % more than the spot price. Besides, you cannot sell the coins to the banks, because banks are not authorised to buy back those coins. So instead of gold coins and bars, consider these options , which make more sense from an investment perspective. 

E-GOLD 

You can invest in e-gold , an initiative by the National Spot Exchange . The clearing and settlement takes place on a T+2 basis. The main advantage is the transparent pricing and the ability to convert virtual gold into physical gold. 

The purchase of e-gold has certain costs attached. The brokerage ranges between 0.25% and 0.5%. The exchange levies a turnover charge of . 20 per lakh of turnover from both the buyer and the seller per month. An investor also has to pay 60 paise per unit of e-gold as maintenance charges. The exchange levies . 200 each for conversion of eight-gram and 10-gram coins. For 100-gram coins, the conversion charges for making and packing are . 100. "The only issue is you have to open a separate depository account with a broker," says Swapnil Pawar , chief investment officer at Karvy Private Wealth. 

GOLD ETF 

The next option is a gold ETF, in which the units of the fund move in tandem with gold prices. Typically , every unit of a gold ETF represents one gram of gold, except in Quantum Gold ETF, where each unit represents half a gram of gold. Investors have to open a demat account for buying gold ETFs. "In a gold ETF or a gold fund of funds, the investor will not see the gold. Hence, the custodian of gold or the AMC should be trustworthy and financially sound," Pawar says. Besides, gold ETFs attract a fund management charge of 1%. 

GOLD FUND OF FUNDS 

Recently, Reliance and Kotak asset management companies launched gold mutual funds targeted at the retail individuals. You don't need a demat account for these gold funds, which work like a mutual fund. The investment amount can be as little as . 5,000 and you will have the flexibility of opting for an SIP (systematic investment plan) or STP (systematic transfer plan), unlike in a gold ETF. "The gold fund of funds will be costlier by at least 0.5% when compared with gold ETFs, because of the AMC set-up . Hence, investors who have demat accounts should opt for gold ETFs," Pawar of Karvy Private Wealth says. 

WORLD GOLD FUNDS 

These funds, like DSP BlackRock World Gold Fund and AIG World Gold Fund , invest in gold mining companies, which offer appreciation when gold prices go up. "But these companies can get impacted by the equity markets. Gold prices rose even when the entire world was battling the US-led recession. But the market mayhem weighed on the stock prices of these mining companies, which muted the returns of these funds," Karpe of Altamount points out. 

WHAT SHOULD YOU CHOOSE? 

"It depends on the end use of gold. If parents are investing in gold to make jewellery for their children, I would advise them to invest in coins/bars. If it's for retirement or just another investment for retirement, I would recommend ETFs as they act like quasi-cash ," says Kartik Jhaveri, a certified financial planner with Transcend India. 

THE TAX ASPECT 

"I would prefer gold ETFs or an open-ended gold fund because the threshold is only one year. Secondly , it doesn't get added to the taxable wealth of the investor, which makes these options taxfriendly than gold coins/bars or even e-gold," says Vaibhav Sanla, executive director, Adroit, a tax consultancy firm. Financial advisors, however, emphasise, that investors should not allocate more than 15% of their investments in gold. Also, an investment in gold should be for at least 3-4 years, they say. 

What investment options are available to NRI's for their repatriable corpus? How can we be of value to you..

 

• Non Resident Indians can invest in Government Securities and Treasury Bills through a Primary Dealer. The same will be issued to Non Resident Indians in a dematerialized form, and Non Resident Indians have to establish to the primary dealer that the source of funds is external in order to allow Non Resident Indians to put the proceeds on maturity into an NRE account.
• Non Resident Indians can purchase and redeem units of domestic Mutual Funds, by simply mentioning Non Resident Indians status as NRI in purchase form, and by issuing a cheque from Non Resident Indians NRE account. However, if Non Resident Indians invest in the Money Market Mutual Fund, they will not be permitted to repatriate proceeds of redemption.
• Non Resident Indians are also permitted to invest in Bonds issued by public sector undertakings (PSUs) in India from Non Resident Indians NRE account and credit the proceeds back into the NRE account.
• Non Resident Indians can purchase Shares, both in the Primary as well as the secondary market.
  
  Primary Market
  
  In the primary market, Non Resident Indians may invest either through an Initial Public Offer (IPO) of Public Limited companies, or in Public Sector Enterprises being dis-invested by the Government of India. This will be mentioned in the prospectus/application form and the company will have taken the approval to invite Non-resident funds.
  
  Secondary Markets / On a stock exchange
  
  Non Resident Indians are permitted to trade in shares listed on the Stock exchange under what is called the Portfolio Investment Scheme (PIS). Non Resident Indians will simply have to open a separate NRE savings and an NRE Demat account and obtain a permission (through us) to do so. We will guide and assist Non Resident Indians with the formalities.
• Non Resident Indians are also entitled to place Non Resident Indians money in Deposits with Indian companies, non-banking finance companies registered with RBI, housing finance companies and other financial institutions. The company will have taken the permission for RBI to allow Non Resident Indians to invest, and will then make an appropriate mention / invitation to Non Resident Indians.

NRI's repatriating property and investment income

As an NRI can I repatriate money from my Property and Investment Income? Common FAQ from NRI Clients.

All forms of current income arising out of investments in India are repatriable. This includes income by way of interest, dividends, rentals, etc. Current income is repatriable even if the asset generating the income itself is not.

There is no ceiling on the value of such remittances and the amounts are remitted out of the NRO Account based on the following documents: The documents required to be produced are:
1. Account holder's Letter instructing the remittance
2. Copy of document/s establishing the inheritance and value of proceeds credited to the NRO account
3. Chartered accountant's certificate in the format prescribed by IT authorities
4. Cheque or debit authority if the same is not contained in the letter in item (i)
5. Application in Form A2

What does it take to build a Wealth Advisory Business..

Hi Fellow Advisors,

Building a world class wealth  advisory practice is'nt complicated but it takes a lot of strategizing, using the right techniques.. relentlessly, every step of the way..Appended below is what you could call a direction map. We could debate and elaborate on each of the points.

1. Identify your natural niche market and have a plan of action on how to focus on it
   
2. Get at least 8 appointments a week early in your career by using the right methods to target and contact potential clients
   
3. Make the most of every appointment by going in with a clear plan and identifying specific objectives
   
4. Turn prospects into clients systematically winning them over with proven methods and strategies
   
5. Employ a practical wealth-management process to continuously build on your growing assets
   
6. Significantly increase the number of new affluent households that you bring into your practice
   
7. Use powerful time-management techniques to stay organised and complete the daily activities required to gain momentum and build your practice 

Can I repatriate money from the Sale Proceeds of my Immovable Property? FAQ by NRI's

There are fairly liberal provisions relating to remitting overseas, proceeds arising from sale of properties in India. These provisions can be considered under three categories:

• Property acquired by the Non Resident after becoming a non-resident and out of either remittances from abroad or from NRE and FCNR deposits held with banks. The extent of remittance is restricted to the amount of repatriable funds used to acquire the property. Further the facility is restricted to two properties.
  
  The documents required to be produced are:
  • Account holder's Letter giving details of purpose of remittance and certifying the same
  • Copies of sale deeds or other property ownership document evidencing the acquisition and sales consideration
  • Evidence that the acquisition was from repatriable sources (inward remittance certificate and/or certificate that the payment was made from NRE/FCNR deposits)
  • Cheque or debit authority if the same is not contained in the letter in item (i)
  • Application in Form A2
  • Chartered accountant's certificate in the format prescribed by IT authorities
• Sale proceeds of immovable properties held by NRIs/PIOs can be remitted along with other remittances allowed out of NRO accounts mentioned earlier in the note subject to a value ceiling of USD 1,000,000 per financial year (April-March)
  
  The documents required to be produced are:
  • Account holder's Letter giving details of purpose of remittance and certifying the same
  • Copies of sale deeds or other property ownership document evidencing the holding of the property for ten years and the sale consideration
  • Cheque or debit authority if the same is not contained in the letter in item (i)
  • Application in Form A2
  • Chartered accountant's certificate in the format prescribed by IT authorities
• Property acquired by inheritance as an NRI can be remitted along with other remittances allowed out of NRO accounts mentioned earlier in the note Requirements subject to a value ceiling of USD 1,000,000 per financial year (April-March): The documents required to be produced are
  • Account holder's Letter giving details of purpose of remittance and certifying the same
  • Copy of document/s establishing the inheritance and sale proceeds of property credited to the NRO account
  • Cheque or debit authority if the same is not contained in the letter in item (i)
  • Application in Form A2

 

Categories:

Financial management, asset management, investment banking, investment management, portfolio management, financial planner, personal banking, private bank, private banking, what is private banking, what is wealth management, wealth management,  private banks, about wealth management, fund management, investment companies, financial advisor, asset management company,  banking management,  asset managers, certified financial planner, financial advisors, wealth creation, investment in, investments in, direct investment, capital investment, investment in company,Wealth management, investments in India, taxes in india, direct investment in india,Investment in business, investment in companies, wealth in india, financial advisors, direct investments,portfolio investment, investment and finance, capital investments, family office, foreign companies in india, foreign investments in india,  foreign company in india, the family office,  what is family office, capital investors,  investment in assets,  fdi investments in india, portfolio investments,  investments in property, Praveen Saanker, Praveen saanker, Praveen

 

NRI Income in India

NRI Income in India All income earned by NRIs in India is taxable and returns are to be filed every year. Under Section 9 (I) (ii) of the IT Act, salary earned in India is chargeable to tax. Under Section 115G of the IT Act, it is not mandatory for a non-resident Indian to file returns if the tax on his Indian income constituting investment income and long term gains has been deducted at source

Resident Indian earning income on short-time assignments abroad

As a ‘resident’ Indian, not having met the eligibility status of NRI, tax is payable.
A deduction of 75% can be applied for within 6 months of the end of the financial year under Section 80RRA by technicians. The rest of the allowance is taxed at a marginal rate. Technicians include individuals working on construction/manufacturing/mining/power generation etc; agricultural activities; public administration and business management; accountancy; applied sciences and social sciences

Resident Indian proceeding for overseas employment:- Common doubt on Income tax rules

A resident Indian proceeding overseas for employment has to apply for an Income Tax Clearance Certificate on Form 31, as per Section 230 (I) of the Income Tax Act 1961. The Assessing Officer assessing the applicant’s form would provide Form 32 which authorizes the application. Other than the Income Tax Clearance Certificate, no other information needs to be given to the IT authorities before taking up employment

For many people, estate planning falls under the same category as going to the dentist: deal with it as seldom as possible or only when absolutely necessary. In addition, those with low incomes and low net worth often feel that estate planning is unnecessary, and is a process reserved for the rich. However, what most people don't know is that proper estate planning goes beyond allocating money or other assets. There are a number of common estate planning errors that can be avoided by arming yourself with adequate knowledge about estate planning. In this article, we'll examine seven of the most common estate planning errors.

No Estate Plan
Many individuals do not realize that estate planning includes the preparation of documents such as living wills, which include provisions for touchy situations like when one should be taken off life support, as well as traditional wills, which makes provisions for the disposition of property and the guardianship of minor children. Preparing these documents helps to ensure that a person's wishes are clearly documented. Regardless of the size of the estate, preparing a will can help to prevent quarreling and bitterness among beneficiaries, who may otherwise feel that they are the rightful benefactors of a decedent's assets.

Ignoring the Sunset Provision
As of 2008, estates benefit from an exemption from federal estate taxes, for amounts up to $2 million. This amount will increase to $3.5 million in 2009, be repealed in 2010, and is scheduled to be increased to $1 million in 2011. While it may be optimistic to hope that a more favorable provision will be passed for 2011 and after, it may not wise to bank on such changes. Therefore, those with more than $1 million dollars in assets should stay abreast of any future changes so that they can be prepared to alter their estate plans accordingly, if necessary.

Being Unaware of the Gift Tax Impact on Joint Ownership
One method that many individuals use to avoid probate is to title assets in joint names with a friend, relative or other individual. However, unless an exception applies - as is the case when the joint owner is the owner's spouse - this can generate a taxable gift in the current year if 50% of the value of the asset is worth more than the annual gift tax exclusion amount.

For example, if Bill Jones puts his friend Fred's name on the title of a $50,000 car that Bill owns, Bill will be liable for gift tax on $13,000 of the car's value. The annual gift tax exclusion is $12,000 for 2007 and 2008. This means that one can give cash or assets of that amount or less to another person each year without paying gift tax. But because the car is valued at $50,000, half of the value of the car ($25,000) will legally become Fred's property; therefore,  Therefore $13,000 will be taxable.

Failure to Use Unified Credit
Failure to use unified credit is a costly error committed by an astonishing percentage of affluent households. When the first spouse passes away, generally all of his or her assets pass to the surviving spouse. However, if the deceased spouse had assets valued over the unified credit limit ($5 million as of 2008), then the exclusion for those assets will be lost if they are transferred directly to the spouse, who will then only have his or her exclusion to count against assets distributed to heirs when he or she dies. As such, a credit shelter trust should be established that shields the assets of the first spouse to die and allows his or her unified credit limit to be used as well.

Failure to Gift Assets Before Death
One of the easiest ways to reduce one's taxable estate is to gift assets to friends or relatives each year within the gift tax exclusion limit. This is a convenient way not only to reduce the taxes your estate may have to pay after you're gone, but also to see whether your beneficiaries are capable of using your assets wisely. If they squander the gifts you give them during your lifetime, then you may want to consider leaving your assets to them in an incentive trust that rewards them for fiscally responsible behavior.

Failing to Ensure Retirement Plans Have the Correct Beneficiary Designations
The beneficiaries of retirement accounts will sometimes change, particularly if the primary beneficiary predeceases the account owner. However, the account owner must usually complete a new beneficiary designation form, indicating the new beneficiary. Otherwise, the beneficiary might be determined under the default terms of the account agreement. Consider also that the payout options under most retirement plans often depend on whether the beneficiary is a spouse of the owner. Further, these options may be irrevocable after the beneficiary's initial payout election. There can be nasty tax repercussions for those who are not careful in this matter, and beneficiaries should be educated on how their elections could impact the taxes on their inherited amounts.

Make Sure You're Covered
Regardless of your income bracket, having adequate life insurance coverage is vital in most cases. Low-income households can benefit from term insurance coverage to replace income lost as a result of the death of the primary breadwinner, while affluent families may need the proceeds from insurance to provide liquidity upon the death of the insured. However, it may be important that those in the latter category transfer ownership of the policies to an irrevocable trust in order to avoid estate taxation on the death benefit.

Conclusion
These are just some of the errors that individuals often make with their estates. The good news is that many of these can be easily and quickly rectified, providing the corrective steps are taken before death. Consult with professionals who can help to ensure that your estate planning is on track. These individuals may include your financial or estate planner and your tax attorney.

by Mark P. Cussen

Mark P. Cussen has over 13 years of experience in the financial industry, which includes working with investments, insurance, mortgages, taxes and financial planning. He has two years of experience in writing and editing insurance and securities test training manuals, as well as other financial topics. He has also worked in in retail, discount and bank brokerage systems and been involved in a venture capital enterprise in the oil and gas sector. Mark has a Bachelor of Science in English from the

of

Kansas

and completed his CFP®; coursework at the Bloch School of Business at the University of Missouri-Kansas City in August of 2001.

University

Reverse mortgages are a way for elderly people to draw an income (either in installments or a lump sum) against the equity that they've built up in their homes. For many older people in need of funds to live on, it is nothing short of a blessing, but there are some pitfalls to the process that everyone should consider. Find out what you need to know before taking the plunge.

High Costs

Although an individual is technically tapping the equity on his or her own house, the bank charges a fee to initiate the transaction. In fact, according to Reverse Mortgage.Org, as part of a reverse mortgage, homeowners may be required to pay an origination fee of $2,000 or 2% of the loan amount, whichever is higher. Some homeowners choose to fold this fee into the loan and pay it back over time with interest.

In addition, there are other fees that homeowners may be responsible for, such as an appraisal fee, which can range in the hundreds of dollars, a recording and credit report fee, which tends to be about $200, and a pest inspection and a flood certification fee, which are about $150 (for both). Finally, homeowners may also be asked to get mortgage insurance, and may be charged a flat monthly account "service fee", which can range from $30 to $35 a month. In short, the costs associated with a reverse mortgage can initially nibble away at the income you'll receive.

Homeowners in need of liquidity who are considering selling their homes within the next several years would probably be better off applying for a more traditional line of credit, a home-equity loan or a personal loan, given the large upfront costs associated with the process.

Your Kids Might Not Inherit the Family Home

Parents may like to pass the family home onto the next generation. However, when a reverse mortgage is taken out, even though the lending institution does not take title to the home, the mortgagee has an obligation to pay back the loan over time with interest. In many cases, that repayment is made by selling the home and then turning over the proceeds (or a portion of them) to the bank.

As a possible workaround to avoid selling the family home, some families will take out an insurance policy on the homeowner and then make an adult child or the lending institution the beneficiary. Using this strategy, the bank may repaid without having to sell the property upon the homeowner's death. Consider consulting with an insurance agent to determine the best way to ensure that proceeds from such a policy are sufficient enough to satisfy the outstanding loan.

Impact on Future Financing

When an individual initiates a reverse mortgage, he or she is creating a huge liability because the loan must be repaid with interest. However, many individuals do not realize that establishing a reverse mortgage may jeopardize their ability to obtain financing at a later date.

On the surface, this may not seem like a concern for elderly homeowners given that they are unlikely to buy another home or make a sizable purchase, but it can have an adverse impact on applications for car and personal loans. It may also impact a homeowner's ability to acquire credit cards.

Reverse Mortgages May Impact Medicaid Benefits

Lending institutions are quick to say that obtaining a reverse mortgage will not affect one's Medicaid payments, but according to RateEmpire.com a site dedicated to lending sources, education and information, "if you receive Medicaid, any reverse mortgage proceeds that you take delivery of must be utilized right away." More specifically, the site says that any retained funds "will count as an asset and may affect your Medicaid eligibility." In other words, this means that if you were to receive $10,000 in a lump sum, you would have to spend that money shortly after receiving it. If you fail to do this, any money left over may count as an asset for Medicated eligibility purposes.

Rate Empire also states that if the total liquid resources are more than $2,000 for an individual or $3,000 for a couple, this could make the person ineligible for Medicaid.

Individuals currently receiving or anticipate receiving Medicaid should consult an accountant and a financial advisor in order to make certain that they are aware of all of the potential ramifications of taking out a reverse mortgage.

Potentially Unfavorable Terms

While the lending institution may neither go after your heirs for money, nor are they entitled to take more than the appraised value of your home, there are several items usually located in the fine print of these contracts that can be disturbing.

For example, some reverse mortgages have clauses that state that the loan must be repaid if the home is unoccupied for a certain period of time. This means that the homeowner could (hypothetically) be in the hospital receiving treatment for a medical condition, and be released to find that their home is in foreclosure.

Furthermore, because homeowners remain responsible for all taxes, insurance and upkeep on the home, failure to pay taxes or maintain adequate insurance could cause the loan to be called.

Keep in mind that the property is also subject to an appraisal. So, while you might have put a large amount of money into your home over the years, there is the chance that it's worth less than you paid. This means that the proceeds that you receive as part of the reverse mortgage process may be less than what you might have anticipated.

Bottom Line

Reverse mortgages are a great way for people to tap the equity in their homes, either in installments or in a lump sum. However, be aware of the potential downsides to entering into such an agreement.

by Glenn Curtis,
Glenn Curtis started his career as an equity analyst at Cantone Research, a New Jersey-based regional brokerage firm. He has since worked as an equity analyst and a financial writer at a number of print/web publications and brokerage firms including Registered Representative Magazine, Advanced Trading Magazine, Worldlyinvestor.com, RealMoney.com, TheStreet.com and Prudential Securities. Curtis has also held Series 6,7,24 and 63 securities licenses.

The recent spurt in economic growth in India has seen a number of Non Resident Indians (NRI) returning to India. NRIs do enjoy special benefits while computing their India Income Tax. It is helpful to know these beneficial provisions so as to reduce tax incidence by proper tax planning.

In this article, we have tried to cover those points which are applicable to NRIs and which must be taken care of while planning for India taxes and filing India tax returns.

Who qualifies as a NRI for India Income Tax purposes?

To be eligible for the ‘NRI’ status, a person should be a non-resident under the Income Tax Act and should either be a citizen of India or a person of Indian origin. A person is of Indian origin if he or his parents or grand parents were born in Undivided India.

A person who has been in India for 60 days or more during a financial year and 365 days or more during the preceding four financial years qualifies as a ‘Resident’ of India. Considering the fact that NRIs may end up staying in India for longer periods while visiting relatives or to take care of India property and investments, the 60 days period is relaxed to 182 days. NRIs based outside India can continue to enjoy non-resident status in India if their presence in India is more than 60 days but less than 182 days, even if their stay in India during the past four financial years is 365 days or more.

Income earned and received outside India is not taxable in India

NRIs are taxable on income accrued or received in India. Income earned and received outside India such as overseas business income, overseas bank interest incomes, etc. is not taxable in India.

Once income is earned and received outside India, it is not taxable in India if at a later date, the money is sent to India. However any income earned, subsequently, on the amounts brought into India will be subject to tax in India.

If a NRI comes back to India and loses his NRI status, he will not be subject to tax in India on his world-wide income if either of the following two conditions are satisfied:

1. He has been in India for not more than 729 days during the preceding seven financial years; or
2. He has qualified as a non-resident for nine out of 10 preceding financial years.

A NRI coming back to India after a long stay outside India may be exempt from tax on his worldwide income for the first two years of his stay in India, if any of the above conditions are satisfied. Similarly, if in any particular financial year, his stay in India exceeds 182 days and he loses his NRI status for that year, his income outside India will still not be taxable if any of the above two conditions are satisfied and his tax status will be that of a ‘Not Ordinarily Resident’.

Tax Treaty Benefits

NRIs can explore beneficial provisions available under various ‘Double Taxation A ance Agreements’ (Tax Treaty) that India has entered into with various countries. These tax treaties often provide lower tax rates and exemptions in addition to those available under the domestic tax provisions.

To give an example, if a NRI is a tax resident of the US as well as of India, the tax treaty between India and US may become applicable to him. The NRI may be taxable in India on interest income at domestic tax rates. However, the tax treaty limits the maximum rate of tax applicable on interest income in India for US tax residents to 15%.

Investments in Indian companies/Government Securities in foreign exchange are taxable at lower rates

Shares of any Indian company, debentures of any Indian public company, deposits with any public company or any security of the Central government, which are purchased with foreign currency, are given special tax treatment. The interest income from these investments is taxable at a flat rate of 20% and long-term capital gains on sale of these investments are taxable at a flat rate of 10%. The sale of these investments is exempt from tax if the sale proceeds are reinvested in similar investments within six months. If the sale proceeds of these assets are partially re-invested, then the exemption is proportionate to the amount re-invested.

NRIs are not required to file any tax returns in India if the income comprises of investment incomes discussed in the previous paragraph and taxes have been withheld at source from such incomes. If the tax rate as per the Tax Treaty is lower than the tax rate as per the income tax provisions or for any other reason, the NRI does not wish to be governed by special provisions applicable to NRIs under the domestic tax law, he can opt out by giving a written declaration along with his return of income.

Elimination of Foreign Exchange Fluctuation in computing capital gains

There is a special method of elimination of foreign exchange fluctuation in computing capital gains on the shares/debenture of an Indian company, acquired in foreign currency by non-residents. The purchase price and sale price are converted back into foreign currency as per the rate of exchange prevailing on the date of purchase/sale. Capital gains are determined in foreign currency and converted into Indian Rupees at the rate of exchange on the date of sale. However, in such cases, the benefit of indexation on account of inflation is not available.

Interest earned by NRIs on Non Resident External (NRE) bank account is exempt from tax

However, interest in Non Resident Ordinary (NRO) bank account is taxable. A NRI returning to India and having NRE/NRO bank accounts is required to report his return to his bankers, who shall then convert these accounts to resident bank accounts. The interest income earned on resident bank accounts is taxable.

Wealth Tax is not applicable on assets held outside India by NRIs

A NRI is not subject to wealth tax in respect of assets held outside India. A NRI returning to India and/or losing his NRI status will not be subject to wealth tax on assets held outside India if either of the following two conditions are satisfied:

1. He has been in India for not more than 729 days during the preceding 7 financial years; or
2. He has qualified as a non-resident for 9 out of 10 preceding financial years.

Permanent Account Number (PAN)

Tax Returns are not accepted without PAN. Therefore, if a tax return is to be submitted, NRIs must obtain a PAN.

Advance Rulings

While computing his income tax liability, if any position on the tax law is not clear, NRIs can approach the Authority for Advance Rulings (AAR) to decide on that tax matter. The rulings of the AAR are binding both on the tax authorities and the applicant NRI.

Whilst NRIs do enjoy some privileges under the Indian Income Tax Act, the Government may do well to create more attractive and tax saving schemes for NRIs and thereby attract foreign exchange inflow into the country.

The authors, Gaurav Taneja and Sonu Soni Iyer, are senior tax professionals with Ernst & Young

Guidelines for property acquisition by an NRI are laid down by FEMA Regulations, notified vide RBI Notification No. FEMA 21/2000-RB. NRIs and PIOs can acquire immovable property in India in the following ways: 

1) By way of Purchase

An NRI/PIO can acquire a residential or commercial property by purchasing it under the general permission granted by the RBI. Payment for purchasing the property should be made only out of funds remitted to India through normal banking channels or funds held in NRE/ FCNR/NRO accounts maintained in India. No payment can be made outside India.

A declaration is required to be submitted to Reserve Bank of India (Central Office) about the real estate acquisition of property by an NRI in form IPI 7 within a period of 90 days from the acquisition/final payment of purchase consideration, along with a certified copy of the document as evidence of the transaction and Bank certificate stating the amount paid.

2) By way of Gift

An NRI/PIO can acquire immovable property (only residential/commercial property) by way of gift from a resident of India, an NRI or a PIO. Agricultural land/plantation property/farmhouse in India cannot be acquired by way of gift.

       A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.

3) By way of Inheritance

NRIs/PIOs/ foreign nationals of non-Indian origin are eligible to hold immovable property acquired by way of inheritance from a resident Indian / NRI or PIO. However, they would need specific approval from the RBI to hold any immovable property in India if acquired from a person resident outside India.

It is mandatory that the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange regulations applicable at the time of acquisition.

       Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan are required to seek specific approval of the Reserve Bank of India before being able to inherit any immovable property in India.

Documents Required for Acquisition of Property

1. Title Deed
2. Tax Receipt
3. Bills
4. Encumbrance Certificate
5. Document showing measurement of Land
6. Registration Papers

Key facts on acquisition of property by NRI by Purchase/Gift/Inheritance

1. There is no lock-in period now for any acquisition of immovable property.
2. All the sale proceeds of residential/commercial property received by way of gift by NRI should be credited to NRO accounts only.
3. Sale proceeds of property inherited from a resident Indian not exceeding USD 1 million can be remitted abroad in one calendar year.
4. Sale proceeds of property inherited from an NRI cannot be repatriated.
5. Sale proceeds of residential/commercial property received by way of gift by NRI/PIO can only be credited to NRO account.
6. NRIs can seek an agreement with their relatives in the form of Power of Attorney in their resident country. This way, in their absence their relatives can represent them during the proceedings.

Repatriation is the transfer of funds from India to accounts held overseas. Repatriation pertaining to Real Estate in India is in accordance with the provision of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 as defined in Sections 6 and 47 of FEMA, 1999 and Notification No. FEMA 21/2000-RB dated May 3, 2000.

Funds on which Repatriation is allowed in India:
If you are a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO), you can avail of repatriation facility on:

·       Sale proceeds of immovable property acquired in India out of your repatriable funds, without any lock-in period. Sale proceeds of immovable property bought from foreign currency.

·       Assets acquired by way of Inheritance/legacy/bequest, without any lock-in period.

·       Deposit with a bank or a firm or a company from funds brought from abroad.

·       Provident fund balance or superannuation benefits.

·       Amount of claim or maturity proceeds of insurance policy.

·       Sale proceeds of shares, securities.

·       Refund of application/earnest money/purchase consideration made by house-building agencies/seller on account of non-allotment of flats/plots/cancellation of booking/deals for purchase of residential/commercial properties along with interest and net of taxes, if original payment is made out of NRE/FCNR (B) account/inward remittances.

However, all persons, whether resident in India or outside India, who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan, require prior permission of Reserve Bank for transferring any immovable property in India.

Conditions for Repatriation of Sale Proceeds from property:

1.    Property against which remittance is sought should be acquired as per the applicable laws and in accordance with the provisions of foreign exchange law in force.

2.    Documentary evidence in support of the acquisition of the funds/assets proposed to be remitted should be produced. It is required by banks for the same.

3.    Undertaking and Certification relating to tax compliance are mandatory.

4.    Proceeds should not exceed the amount paid for acquiring the property.

5.    Subject to fulfillment of few conditions, proceeds should be credited to NRE account.

6.    Repatriation of sale proceeds of residential properties is restricted to two such properties.

7.    Repatriation of sale proceeds of immovable property acquired out of Rupee fund (inward remittance) is available only if the property is held for a minimum period of 10 years. If such a property acquired out of Rupee fund is sold within 10 years, remittance can be made, only if the sale proceeds have been held by the NRI/PIO for the balance period in an NRO Account (Savings/Term Deposits) or in any other eligible security provided such investment is traced to the sale proceeds of the immovable property.

8.    Repatriation should be done via 'authorised person'. Authorised person means an authorized dealer/offshore banking unit or any other person for the time being authorised to deal in foreign exchange or foreign securities, by the RBI.

9.    Citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan shall require prior approval from RBI to apply for repatriation.

NRI banking norms:
Repatriation of sales proceeds of an immovable property is allowed by banks, subject to fulfillment of the following points:

1.    Sale proceeds of property purchased with native currency by an NRI do not qualify for repatriation.

2.    Sale proceeds of property purchased with foreign currency qualifies for repatriation amount not exceeding $ I million, subject to two conditions:

o   Remittance for the concerned property was done outside India, in accordance with regulation of FEMA, 1999.

o   Property in question is registered with RBI within 3 months of purchase.

3.    Real Estate acquired as gift by NRI qualifies for repatriation and can be repatriated to only NRO account held by him.

4.    Inherited property can also be repatriated on producing proof of inheritance, undertaking by the remitter and a certificate from a Chartered Accountant. This is subject to RBI approval.

5.    Property purchased on loan also falls under repatriable investment if the loan has either been repaid per norms or an undertaking by a Chartered Accountant is enclosed.

Channels of Repatriation
NRI Accounts:

·       NRE (Non Resident External Account) account (Savings/Current/ Fixed Deposits): Is freely repatriable (principal and interest) and does not require prior permission from RBI. Many banks like HDFC, PNB, SBI, ICICI et al offer NRE facilities.

·       FCNR (Foreign Currency Non Resident Account) (Deposits): FCNR Deposits are fully repatriable (principal and interest). And the entire deposit is exempt from tax. All major banks HDFC, ICICI, SBI offer this facility.

·       NRO account Non- Resident Ordinary Account(Savings): NRO deposits are not repatriable (principal) except on current NRI income like rent, dividend, pension, etc. and remittances indicated under "Repatriation of NRO Funds" only after payment of taxes due in India. Interest is freely repatriable. The NRI may remit up to USD one million per calendar year.

·       RFC account (Resident Foreign account): This account is available for returning Indians only, that is Indian who have permanently returned to India after holding NRI status. Funds can be repatriated on a need basis.

Repatriation Procedure:
To apply for repatriation, an NRI should make an application in the prescribed format to an authorized dealer only, that is, a bank/dealer authorised to deal in foreign exchange by the RBI. The authorized dealer on satisfying itself with the particulars/documents submitted by the concerned NRI may allow the repatriation of the same.

The documents required while seeking Repatriation:

1.    Application for permission in prescribed format in Form IPI 8 to repatriate the original investment made in immovable property held  in India.

2.    Certified copy of the purchase agreement.

3.    Certified copy of the sale agreement.

4.    Original bank documents proving that the purchase has been made from abroad or from an NRE account held by the seller.

5.    Proof of the Capital gain tax, if any, deducted at source and paid to the Government by the purchaser of the property

THE income tax authorities for various reasons may issue a tax enquiry notice. Sometimes you may also receive a notice despite filing your returns.
   

Issue of notice where a tax return has not been filed: Salaried employees are required to have their returns filed by July 31, each year for the income earned by them during the previous financial year. To illustrate: For the financial year April 1, 2006 up to March 31, 2007, the tax return was due by July 31, 2007. In case no return of income has been filed but the tax officer feels that a return should have been filed, he or she may issue a notice under Section 142(1) of the Income Tax Act requiring such person to file a return of income within the specified time.

Tax notice where a tax return has been filed: It is possible to get a notice from the tax officer, even if you have duly filed your tax return, in the following situations:

A tax enquiry notice is most commonly issued for audit of income and expense details disclosed in the return of income, commonly referred to as “ax scrutiny proceedings”. under tax scrutiny proceedings, a notice is issued under Section 143(2) of the act if the tax officer believes that less income has been disclosed or excessive claims have been made of losses, exemptions, deductions, allowance or relief in the return. The tax payer is normally requested to answer certain questions, file documents as evidence and provide additional information. However, such a notice has to be issued within a certain period; it cannot be issued to the tax payer after the expiry of twelve months from the end of the month in which the return of income was filed.

There is also a provision under the act, which empowers a tax officer to initiate audit proceedings by issuing a notice under section 148 for the past six assessment years for which scrutiny proceedings may or may not have been conducted, subject to satisfaction of certain conditions. These proceedings are commonly referred to as “reassessment proceedings” and are initiated where the tax officer has reasons to believe income which should have been taxed has escaped audit i.e. no taxes have been paid on such income by the tax payer. For instance: As on November 1, 2007, reassessment proceedings can be initiated for assessment year 2001-02 (financial year April 1, 2000 to March 31, 2001), and onwards.
In cases, where a taxpayer has filed his return, and a tax officer requires certain additional information, a notice may be issued under section 142(1) of the Act. A tax notice may also be issued where a return is found to be defective. In such a case, the tax payer is issued a notice under section 139(9) of the act requiring the taxpayer to rectify the defect within 15 days from the date of notice or such extended period which the authorities may permit. To illustrate: if you have missed filling in all the details in the required columns in your tax return, the return would be treated as defective and you would have to rectify the error.
 

Even a third party can be served a notice to collect information about you. For example, the tax officer can issue notice to a bank asking for the account details of a person who has an account with the said bank.
   

How to respond to a tax notice? In relatively simple issues, you may attempt to handle the situation on your own but in complex cases, please go to your tax advisor. Here are some action points:
   

Verify the validity of notice as regards whether the same has been issued within the time limit prescribed for issue of such notice and whether appropriate procedures have been followed while issuing the notice. Typically, the act provides for a limitation period for issuance of all kinds of notices.
   

Go through your past returns, assessments orders, financial statements before responding to the tax officer. Be aware of the deadline for responding to a notice or attending a tax hearing, as any non-compliance may be viewed as non-cooperation and may adversely influence the outcome of the enquiry proceedings.
 

Unless the notice or summon requires personal appearance of a person, the details/ information may be furnished via post or through an authorised representative (your tax advisor). So next time you receive a tax enquiry notice don’t panic. Just follow the above procedures.

Buy a home, go for joint ownership if you are two salaried persons, buy a second property, or even sell the existing one...if you plan well, there are various options to save tax on hard-earned money

THE Indian economy has been witnessing a boom in the recent past. However, rising property prices and growing interest burden on home loans are worrying buyers. The Budget has not offered any relief, but you can still make ample use of the existing provisions to save substantially on property investments. Here’s how….
   
BUYING A HOUSE   

Owning a house is not just a dream but
   a necessity, and there are several tax
   benefits as well. However, when buying a house, you would do well to consider the following.
   (a) It’s always advisable to go in for a housing loan. Interest paid on home loans can be deducted from your taxable income up to a maximum of Rs 1.5 lakh. This can be a double bonanza in the case of joint ownership. If the joint owners equally bear the interest burden, each gets a deduction up to Rs 1.5 lakh.
   However, the total deduction cannot exceed the actual interest paid by the joint owners. So, if the total yearly interest liability is, say Rs 4 lakh, and the property is equally owned by three people, then each gets a deduction of Rs 1,33,333.
   (b) Principal repayment up to Rs 1 lakh is allowed as a deduction from your taxable income under Section 80C, provided the loan is borrowed from a recognised financial institution.

OWNING TWO OR MORE HOUSES

These days it’s not uncommon to see people owning more than one property. While interest paid on loan taken for a single property is eligible for deduction up to Rs 1.5 lakh only, no such ceiling is prescribed for a new loan taken to purchase a second property. Thus, if your rental income from the second property is Rs 4 lakh and the interest expense on loan taken for the second property is Rs 2.5 lakh, then your income from house property shall be calculated as below:
By claiming deduction for the entire interest expense of Rs 2.5 lakh, you can substantially reduce your tax liability.
Had there been no deduction of interest expense, you would have had to pay tax on Rs 2.8 lakh instead of Rs 30,000.
However, if your second house is lying vacant, generating no rental income, you can still claim deduction for the interest paid. There will nevertheless be a notional rental income and the interest will be deducted from this income.

SELLING PROPERTY   

To minimise tax outflow while selling a property, take into account the following.
   (a) A property or house held for under three years is termed as a short-term capital asset and does not attract any tax incentive. However, if you sell the property only after three years, it is a long-term capital asset, which is eligible for some tax relief.
   (b)Selling property attracts capital gains tax. However, if you invest the proceeds from selling the property into buying or constructing another house, the taxman exempts you from paying taxes. But keep in mind the following:

• If you intend to purchase a new house, do so either one year before or within two years of selling your existing property.

• If you are constructing a new house, then ensure that it is done within three years of the sale of the earlier property. You can start construction even before the transfer of the existing property. However, ensure that it is completed within the stipulated time.

• If you have already sold your property, and could not acquire a new house before the due date for filing tax returns, you can deposit the money in the ‘capital gains deposit account scheme’ with any nationalised bank.
   (c) Even those who do not want to buy a new house can avail of some tax benefits. All you need to do is invest the proceeds from the sale of the property in capital gains bonds issued by NHAI or REC within six months of the deal. The maximum investment permitted in such bonds is Rs 50 lakh, and these bonds can be redeemed only after three years from the date of investment.

Estate planning is more than simply having a will. It is a continuous planning process done to alleviate the financial impact of your death on those you leave behind. By spending just a few hours and dollars now, you can save your loved ones or beneficiaries from paying as much as a 47% estate tax. But a well-constructed estate plan may not only reduce the tax bill, but also help your loved ones understand, resolve and prepare for many of the issues that arise when settling an estate. We'll show you where to start.

Dying without a Will - Dying without a will is known as dying intestate. If this were to happen in the U.S.intestate succession laws would come into play, and your relatives would have to go through probate to claim ownership of assets, perhaps even fight over assets. The state would determine how your property passes to your heirs. If no heirs fit the state's formula, your assets may become property of the state. A will can help you avoid the pitfalls of dying intestate; however, even if you have a will, your assets will still be subjected to the timely and costly probate process (court involvement).

How a Will Can Help
A will primarily allows you to control the distribution of your assets and state your final wishes.
One very important advantage of a will is that it allows you to recommend a guardian to care for your children or other dependent beneficiaries in the event of your death. Because this is an overwhelming responsibility, you should select your guardian(s) carefully and also obtain their consent before listing them in your will. Although the final decision concerning guardianship is made by the court, the courts give a lot of weight to the parent's decision in the will.

Other important items on your will are clauses clarifying the will and its purpose. In the exordium clause, for instance, you state your name and residence, and officially declare the document a will. Be careful to note in this clause that the will supersedes all previous wills, making them null and void. In the will you should also name the executor/administrator of your estate and how you would like that person to distribute your assets, including how all your debts, taxes and funeral expenses are to be paid. To avoid family disputes, you may want to add a non-contestability clause, which states that if any beneficiary contests the will, his or her share becomes null and void. Of course, a non-contestability clause is not suitable for every family's circumstance.

How to Start on Your Estate Planning
Now that you understand the importance of having a will, here's a list of steps that gives an overview of the estate planning process:

Make a list of all your assets and liabilities.

Open a family discussion of who should be the guardian for your children.

Check and update your current beneficiaries (those designated for IRAs, life insurance, etc).

Review the current federal estate tax exemption limits (discussed below).

Determine the distribution of your assets upon your death (family, charity, etc).

Discuss your funeral arrangements with your spouse or family.

Seek the assistance of a certified estate-planning attorney.

A simple will may cover all your estate planning needs if the value of your estate falls materially below the estate-tax exclusion amount. The federal estate tax is an excise tax levied on the transfer of a person's property that exceeds a certain amount at the time of that individual's death. If your estate is worth more than the tax exclusion amount, the tax can be hefty. As such, you really need to take a serious look at your personal situation, and, if your estate is more than the tax exclusion, look into more estate-reduction and planning techniques, which will help your beneficiaries avoid the estate tax (we discuss these techniques further below). Keep in mind that direct transfers to your spouse are not taxed - these assets are not taxed until s/he dies (this is called a marital deduction).

Estate-Reduction and Planning Options
Let's take a look at some estate-planning tools and estate-reduction techniques:

Use trusts to maximize the exclusion and avoid probate. Trusts help you do so because they are designated to a beneficiary.

Take advantage of charitable donations to reduce your estate.

Use your estate to pay family educational and medical expenses as these are tax deductible.

Loan assets to family members to minimize your estate.

Buy life insurance to help pay estate taxes, but remember life insurance will provide payouts only under certain conditions (executor or beneficiary should be owner).

Utilize annual gifting (up to $12,000 per person per year) to minimize taxes and maximize the value to your loved ones on your will.

Set up durable powers of attorney.

Establish your funeral and burial plans.

Seek professional help from your financial advisor, an estate-planning specialist or a lawyer specializing in estates.

Sometimes changes in your life - such as a sudden increase in wealth, a new marriage or remarriage, the birth of a child, a serious illness or a death in the family - can trigger the need for an estate plan evaluation. All of these factors could affect your current plan and require revisions or additions.

Summary
Estate planning is truly for the benefit and care of your loved ones, making the legal and financial issues easier to deal with if you pass away. Since planning for death is not always a No.1 priority, we tend to postpone setting up the legal documents. But at a minimum, every competent adult should have a will drafted. The problems associated with probate, creditors, con artists, lawsuits, lawyers and death taxes can all prolong the settlement of your estate. Don't wait to establish your plan until you've heard someone else's horror stories.

by Steven Merkel
Steven T. Merkel, CFP®:, ChFC, is the vice president of portfolio management for Financial Advisory Consultants LLC in Naples, Fla. Steve is a former U.S. Army air defense artillery officer and has been giving financial advice for more than 12 years. He is a Certified Financial Planner® practitioner and a Chartered Financial Consultant. Merkel has been featured and widely quoted in numerous publications including The New York Times, BusinessWeek, Entrepreneur, Consumer Reports, Investment News, Financial Planning Magazine and Fidelity's Stages Quarterly. He enjoys fishing, golf, military history, Miami Hurricane football and relaxing on the beaches of South Florida

Categories Financial management, asset management, investment banking, investment management, portfolio management, financial planner, personal banking, private bank, private banking, what is private banking, what is wealth management, wealth management, private banks, about wealth management, fund management, investment companies, financial advisor, asset management company, banking management, asset managers, certified financial planner, financial advisors, wealth creation, investment in, investments in, direct investment, capital investment, investment in company, Wealth management, investments in India, taxes in india, direct investment in india, Investment in business, investment in companies, wealth in india, financial advisors, direct investments,portfolio investment, investment and finance, capital investments, family office, foreign companies in india, foreign investments in india, foreign company in india, the family office, what is family office, capital investors, investment in assets, fdi investments in india, portfolio investments, investments in property, Praveen Saanker, Praveen saanker, Praveen

.

NRI Taxation In India

Introduction:
Under the Income Tax Act, the residency of an individual decides the scope of payable income tax. The residency of the person in the previous year along with the location of the income accrued in that year determines whether a person will be charged income tax as per a resident Indian or a non-resident Indian.

The definitions of a NRI are different under FEMA and Income Tax Act, enabling the individual to be a non-resident of India under one law and resident of India under another.

Taxation for Non-Resident Indians depends upon his residential status under the Income Tax Act. Any income that is

1. received or deemed to be received in India during the financial year
2. accrued or deemed to be accrued in India
3. accrued or deemed to be accrued outside India but its first receipt is in India forms part of the NRI income tax that he is due to pay.

The income of an NRI can be in the form of:

1. Salaries
2. House Property
3. Capital Gains
4. Business Income

1. Salaries

Depending on whom he is getting his salary from, an NRI has to either pay his income tax or be tax free. Any income in India or by an Indian is taxable whereas income coming from a foreign entity is non-taxable. Superannuation funds and pension are also taxable.

2. House Property - Taxation on Property Transaction

An immovable property (commercial/residential) owned by an NRI is subject to NRI taxation rules and regulations. The NRI taxable income includes the sales proceeds, rent and one of two residential properties as if the property had been let out even if the both are kept vacant. No tax is due on purchase of an immovable property.

The Indian tax laws allow a general deduction of 30% on the rental income and also a deduction towards interest subject to certain conditions.

Non Taxable Properties:
The following categories of property enjoy exemption from taxation:

1. Income earned from a farm house that is been used for agricultural purposes.
2. Income earned from a property used for some charitable purposes.
3. Property used for self occupation. If such a property is being used for business purposes, then the income earned is taxable under the "Business Income" head and not under head "House Income".

3. Capital Gains:

Capital gains are the profits earned when a property owned by NRI and situated in India is sold for a profit. Capital gains can be categorically divided into two types:

       Short Term

       Long Term

       A Short-Term capital gain is the gain on immovable property being sold within a period of 36 months from the acquisition. The liability for taxation is at the rate of 30%.

       A Long-Term capital gain, on the other hand, is on an asset that has been held for more than 36 months by the NRI. The tax thereon would be at the rate of 20%. The tax-inflation index decides the tax on long-term capital gains.

There is no tax on re-investment of long term capital gains and also when it is in the form of shares and securities.

4. Business Income:

Any income generated by any business venture that the NRI engages himself in India is taxable under the Income Tax rules of India applicable to an NRI. It could be selling an asset (metal like gold, silver) for business profit, profit from partnership with an Indian individual or company, cash assistance, payment received in lieu of services/products provided, bonus, interest et al.

Ready Reckoner for NRIs:

       Tax is computed during the financial year, i.e. a period of 12 months from 1st April to 31st March.

       Keep track of the number of days you stay in India from year to year and check the same before making the next trip to India.

       In the 1st year of leaving India for employment outside India, ensure that you leave before 29th September. Otherwise total income of the financial year (including the foreign income) will be taxable in India if it exceeds the basic exemption limit.

       During the last year of your stay abroad before coming back to India, make sure that you come back on or after Feb 1st (or Feb 2nd in case of a leap year) since arrival before this date will make your stay in India exceed 59 days. However, a person whose stay in India in the preceding four (4) previous years does not exceed 365 days, he may return after September 30th of the relevant year without loss of his non-resident status.

       The month for filing returns including NRI tax return is July of the subsequent financial year. An NRI is not required to file the ROI if his assets fall under Specified Assets list (Long Term capital gain, debentures, shares, securities, income form charitable sources) as defined under Section 115 C of Income Tax Act.

India has seen tremendous changes in the taxation scene, in terms of exemptions/concessions for NRIs. The repealing of Gift Tax, exemptions under the Wealth tax, exemption of tax on income from Capital Gains and a host of other changes are indeed very encouraging

Categories Financial management, asset management, investment banking, investment management, portfolio management, financial planner, personal banking, private bank, private banking, what is private banking, what is wealth management, wealth management, private banks, about wealth management, fund management, investment companies, financial advisor, asset management company, banking management, asset managers, certified financial planner, financial advisors, wealth creation, investment in, investments in, direct investment, capital investment, investment in company, Wealth management, investments in India, taxes in india, direct investment in india, Investment in business, investment in companies, wealth in india, financial advisors, direct investments,portfolio investment, investment and finance, capital investments, family office, foreign companies in india, foreign investments in india, foreign company in india, the family office, what is family office, capital investors, investment in assets, fdi investments in india, portfolio investments, investments in property, Praveen Saanker, Praveen saanker, Praveen

Estate Planning - Top 7 Estate Planning Mistakes by Mark P. Cussen,CFP®, CMFC courtesy - Investopedia - Fantastic Estate Planning Pitch

For many people, estate planning falls under the same category as going to the dentist: deal with it as seldom as possible or only when absolutely necessary. In addition, those with low incomes and low net worth often feel that estate planning is unnecessary, and is a process reserved for the rich. However, what most people don't know is that proper estate planning goes beyond allocating money or other assets. There are a number of common estate planning errors that can be avoided by arming yourself with adequate knowledge about estate planning. In this article, we'll examine seven of the most common estate planning errors.

No Estate Plan
Many individuals do not realize that estate planning includes the preparation of documents such as living wills, which include provisions for touchy situations like when one should be taken off life support, as well as traditional wills, which makes provisions for the disposition of property and the guardianship of minor children. Preparing these documents helps to ensure that a person's wishes are clearly documented. Regardless of the size of the estate, preparing a will can help to prevent quarreling and bitterness among beneficiaries, who may otherwise feel that they are the rightful benefactors of a decedent's assets.

Ignoring the Sunset Provision
As of 2008, estates benefit from an exemption from federal estate taxes, for amounts up to $2 million. This amount will increase to $3.5 million in 2009, be repealed in 2010, and is scheduled to be increased to $1 million in 2011. While it may be optimistic to hope that a more favorable provision will be passed for 2011 and after, it may not wise to bank on such changes. Therefore, those with more than $1 million dollars in assets should stay abreast of any future changes so that they can be prepared to alter their estate plans accordingly, if necessary.

Being Unaware of the Gift Tax Impact on Joint Ownership
One method that many individuals use to avoid probate is to title assets in joint names with a friend, relative or other individual. However, unless an exception applies - as is the case when the joint owner is the owner's spouse - this can generate a taxable gift in the current year if 50% of the value of the asset is worth more than the annual gift tax exclusion amount.

For example, if Bill Jones puts his friend Fred's name on the title of a $50,000 car that Bill owns, Bill will be liable for gift tax on $13,000 of the car's value. The annual gift tax exclusion is $12,000 for 2007 and 2008. This means that one can give cash or assets of that amount or less to another person each year without paying gift tax. But because the car is valued at $50,000, half of the value of the car ($25,000) will legally become Fred's property; therefore,  Therefore $13,000 will be taxable.

Failure to Use Unified Credit
Failure to use unified credit is a costly error committed by an astonishing percentage of affluent households. When the first spouse passes away, generally all of his or her assets pass to the surviving spouse. However, if the deceased spouse had assets valued over the unified credit limit ($5 million as of 2008), then the exclusion for those assets will be lost if they are transferred directly to the spouse, who will then only have his or her exclusion to count against assets distributed to heirs when he or she dies. As such, a credit shelter trust should be established that shields the assets of the first spouse to die and allows his or her unified credit limit to be used as well.

Failure to Gift Assets Before Death
One of the easiest ways to reduce one's taxable estate is to gift assets to friends or relatives each year within the gift tax exclusion limit. This is a convenient way not only to reduce the taxes your estate may have to pay after you're gone, but also to see whether your beneficiaries are capable of using your assets wisely. If they squander the gifts you give them during your lifetime, then you may want to consider leaving your assets to them in an incentive trust that rewards them for fiscally responsible behavior.

Failing to Ensure Retirement Plans Have the Correct Beneficiary Designations
The beneficiaries of retirement accounts will sometimes change, particularly if the primary beneficiary predeceases the account owner. However, the account owner must usually complete a new beneficiary designation form, indicating the new beneficiary. Otherwise, the beneficiary might be determined under the default terms of the account agreement. Consider also that the payout options under most retirement plans often depend on whether the beneficiary is a spouse of the owner. Further, these options may be irrevocable after the beneficiary's initial payout election. There can be nasty tax repercussions for those who are not careful in this matter, and beneficiaries should be educated on how their elections could impact the taxes on their inherited amounts.

Make Sure You're Covered
Regardless of your income bracket, having adequate life insurance coverage is vital in most cases. Low-income households can benefit from term insurance coverage to replace income lost as a result of the death of the primary breadwinner, while affluent families may need the proceeds from insurance to provide liquidity upon the death of the insured. However, it may be important that those in the latter category transfer ownership of the policies to an irrevocable trust in order to avoid estate taxation on the death benefit.

Conclusion
These are just some of the errors that individuals often make with their estates. The good news is that many of these can be easily and quickly rectified, providing the corrective steps are taken before death. Consult with professionals who can help to ensure that your estate planning is on track. These individuals may include your financial or estate planner and your tax attorney.

by Mark P. Cussen

Mark P. Cussen has over 13 years of experience in the financial industry, which includes working with investments, insurance, mortgages, taxes and financial planning. He has two years of experience in writing and editing insurance and securities test training manuals, as well as other financial topics. He has also worked in in retail, discount and bank brokerage systems and been involved in a venture capital enterprise in the oil and gas sector. Mark has a Bachelor of Science in English from the

of

Kansas

and completed his CFP®; coursework at the Bloch School of Business at the University of Missouri-Kansas City in August of 2001.

University

Reverse Mortgae - Common Pitfalls by Glenn Curtis

Reverse mortgages are a way for elderly people to draw an income (either in installments or a lump sum) against the equity that they've built up in their homes. For many older people in need of funds to live on, it is nothing short of a blessing, but there are some pitfalls to the process that everyone should consider. Find out what you need to know before taking the plunge.

High Costs

Although an individual is technically tapping the equity on his or her own house, the bank charges a fee to initiate the transaction. In fact, according to Reverse Mortgage.Org, as part of a reverse mortgage, homeowners may be required to pay an origination fee of $2,000 or 2% of the loan amount, whichever is higher. Some homeowners choose to fold this fee into the loan and pay it back over time with interest.

In addition, there are other fees that homeowners may be responsible for, such as an appraisal fee, which can range in the hundreds of dollars, a recording and credit report fee, which tends to be about $200, and a pest inspection and a flood certification fee, which are about $150 (for both). Finally, homeowners may also be asked to get mortgage insurance, and may be charged a flat monthly account "service fee", which can range from $30 to $35 a month. In short, the costs associated with a reverse mortgage can initially nibble away at the income you'll receive.

Homeowners in need of liquidity who are considering selling their homes within the next several years would probably be better off applying for a more traditional line of credit, a home-equity loan or a personal loan, given the large upfront costs associated with the process.

Your Kids Might Not Inherit the Family Home

Parents may like to pass the family home onto the next generation. However, when a reverse mortgage is taken out, even though the lending institution does not take title to the home, the mortgagee has an obligation to pay back the loan over time with interest. In many cases, that repayment is made by selling the home and then turning over the proceeds (or a portion of them) to the bank.

As a possible workaround to avoid selling the family home, some families will take out an insurance policy on the homeowner and then make an adult child or the lending institution the beneficiary. Using this strategy, the bank may repaid without having to sell the property upon the homeowner's death. Consider consulting with an insurance agent to determine the best way to ensure that proceeds from such a policy are sufficient enough to satisfy the outstanding loan.

Impact on Future Financing

When an individual initiates a reverse mortgage, he or she is creating a huge liability because the loan must be repaid with interest. However, many individuals do not realize that establishing a reverse mortgage may jeopardize their ability to obtain financing at a later date.

On the surface, this may not seem like a concern for elderly homeowners given that they are unlikely to buy another home or make a sizable purchase, but it can have an adverse impact on applications for car and personal loans. It may also impact a homeowner's ability to acquire credit cards.

Reverse Mortgages May Impact Medicaid Benefits

Lending institutions are quick to say that obtaining a reverse mortgage will not affect one's Medicaid payments, but according to RateEmpire.com a site dedicated to lending sources, education and information, "if you receive Medicaid, any reverse mortgage proceeds that you take delivery of must be utilized right away." More specifically, the site says that any retained funds "will count as an asset and may affect your Medicaid eligibility." In other words, this means that if you were to receive $10,000 in a lump sum, you would have to spend that money shortly after receiving it. If you fail to do this, any money left over may count as an asset for Medicated eligibility purposes.

Rate Empire also states that if the total liquid resources are more than $2,000 for an individual or $3,000 for a couple, this could make the person ineligible for Medicaid.

Individuals currently receiving or anticipate receiving Medicaid should consult an accountant and a financial advisor in order to make certain that they are aware of all of the potential ramifications of taking out a reverse mortgage.

Potentially Unfavorable Terms

While the lending institution may neither go after your heirs for money, nor are they entitled to take more than the appraised value of your home, there are several items usually located in the fine print of these contracts that can be disturbing.

For example, some reverse mortgages have clauses that state that the loan must be repaid if the home is unoccupied for a certain period of time. This means that the homeowner could (hypothetically) be in the hospital receiving treatment for a medical condition, and be released to find that their home is in foreclosure.

Furthermore, because homeowners remain responsible for all taxes, insurance and upkeep on the home, failure to pay taxes or maintain adequate insurance could cause the loan to be called.

Keep in mind that the property is also subject to an appraisal. So, while you might have put a large amount of money into your home over the years, there is the chance that it's worth less than you paid. This means that the proceeds that you receive as part of the reverse mortgage process may be less than what you might have anticipated.

Bottom Line

Reverse mortgages are a great way for people to tap the equity in their homes, either in installments or in a lump sum. However, be aware of the potential downsides to entering into such an agreement.

by Glenn Curtis,
Glenn Curtis started his career as an equity analyst at Cantone Research, a New Jersey-based regional brokerage firm. He has since worked as an equity analyst and a financial writer at a number of print/web publications and brokerage firms including Registered Representative Magazine, Advanced Trading Magazine, Worldlyinvestor.com, RealMoney.com, TheStreet.com and Prudential Securities. Curtis has also held Series 6,7,24 and 63 securities licenses.

All you wanted to know about NRI Taxation..Article from Money control..The authors, Gaurav Taneja and Sonu Soni Iyer, are senior tax professionals with Ernst & Young

The recent spurt in economic growth in India has seen a number of Non Resident Indians (NRI) returning to India. NRIs do enjoy special benefits while computing their India Income Tax. It is helpful to know these beneficial provisions so as to reduce tax incidence by proper tax planning.

In this article, we have tried to cover those points which are applicable to NRIs and which must be taken care of while planning for India taxes and filing India tax returns.

Who qualifies as a NRI for India Income Tax purposes?

To be eligible for the ‘NRI’ status, a person should be a non-resident under the Income Tax Act and should either be a citizen of India or a person of Indian origin. A person is of Indian origin if he or his parents or grand parents were born in Undivided India.

A person who has been in India for 60 days or more during a financial year and 365 days or more during the preceding four financial years qualifies as a ‘Resident’ of India. Considering the fact that NRIs may end up staying in India for longer periods while visiting relatives or to take care of India property and investments, the 60 days period is relaxed to 182 days. NRIs based outside India can continue to enjoy non-resident status in India if their presence in India is more than 60 days but less than 182 days, even if their stay in India during the past four financial years is 365 days or more.

Income earned and received outside India is not taxable in India

NRIs are taxable on income accrued or received in India. Income earned and received outside India such as overseas business income, overseas bank interest incomes, etc. is not taxable in India.

Once income is earned and received outside India, it is not taxable in India if at a later date, the money is sent to India. However any income earned, subsequently, on the amounts brought into India will be subject to tax in India.

If a NRI comes back to India and loses his NRI status, he will not be subject to tax in India on his world-wide income if either of the following two conditions are satisfied:

1. He has been in India for not more than 729 days during the preceding seven financial years; or
2. He has qualified as a non-resident for nine out of 10 preceding financial years.

A NRI coming back to India after a long stay outside India may be exempt from tax on his worldwide income for the first two years of his stay in India, if any of the above conditions are satisfied. Similarly, if in any particular financial year, his stay in India exceeds 182 days and he loses his NRI status for that year, his income outside India will still not be taxable if any of the above two conditions are satisfied and his tax status will be that of a ‘Not Ordinarily Resident’.

Tax Treaty Benefits

NRIs can explore beneficial provisions available under various ‘Double Taxation A ance Agreements’ (Tax Treaty) that India has entered into with various countries. These tax treaties often provide lower tax rates and exemptions in addition to those available under the domestic tax provisions.

To give an example, if a NRI is a tax resident of the US as well as of India, the tax treaty between India and US may become applicable to him. The NRI may be taxable in India on interest income at domestic tax rates. However, the tax treaty limits the maximum rate of tax applicable on interest income in India for US tax residents to 15%.

Investments in Indian companies/Government Securities in foreign exchange are taxable at lower rates

Shares of any Indian company, debentures of any Indian public company, deposits with any public company or any security of the Central government, which are purchased with foreign currency, are given special tax treatment. The interest income from these investments is taxable at a flat rate of 20% and long-term capital gains on sale of these investments are taxable at a flat rate of 10%. The sale of these investments is exempt from tax if the sale proceeds are reinvested in similar investments within six months. If the sale proceeds of these assets are partially re-invested, then the exemption is proportionate to the amount re-invested.

NRIs are not required to file any tax returns in India if the income comprises of investment incomes discussed in the previous paragraph and taxes have been withheld at source from such incomes. If the tax rate as per the Tax Treaty is lower than the tax rate as per the income tax provisions or for any other reason, the NRI does not wish to be governed by special provisions applicable to NRIs under the domestic tax law, he can opt out by giving a written declaration along with his return of income.

Elimination of Foreign Exchange Fluctuation in computing capital gains

There is a special method of elimination of foreign exchange fluctuation in computing capital gains on the shares/debenture of an Indian company, acquired in foreign currency by non-residents. The purchase price and sale price are converted back into foreign currency as per the rate of exchange prevailing on the date of purchase/sale. Capital gains are determined in foreign currency and converted into Indian Rupees at the rate of exchange on the date of sale. However, in such cases, the benefit of indexation on account of inflation is not available.

Interest earned by NRIs on Non Resident External (NRE) bank account is exempt from tax

However, interest in Non Resident Ordinary (NRO) bank account is taxable. A NRI returning to India and having NRE/NRO bank accounts is required to report his return to his bankers, who shall then convert these accounts to resident bank accounts. The interest income earned on resident bank accounts is taxable.

Wealth Tax is not applicable on assets held outside India by NRIs

A NRI is not subject to wealth tax in respect of assets held outside India. A NRI returning to India and/or losing his NRI status will not be subject to wealth tax on assets held outside India if either of the following two conditions are satisfied:

1. He has been in India for not more than 729 days during the preceding 7 financial years; or
2. He has qualified as a non-resident for 9 out of 10 preceding financial years.

Permanent Account Number (PAN)

Tax Returns are not accepted without PAN. Therefore, if a tax return is to be submitted, NRIs must obtain a PAN.

Advance Rulings

While computing his income tax liability, if any position on the tax law is not clear, NRIs can approach the Authority for Advance Rulings (AAR) to decide on that tax matter. The rulings of the AAR are binding both on the tax authorities and the applicant NRI.

Whilst NRIs do enjoy some privileges under the Indian Income Tax Act, the Government may do well to create more attractive and tax saving schemes for NRIs and thereby attract foreign exchange inflow into the country.

The authors, Gaurav Taneja and Sonu Soni Iyer, are senior tax professionals with Ernst & Young

Guidelines on Acquisition of Property by NRIs, by way of purchase, Gift, Inheritance and Documents required for the same

Guidelines for property acquisition by an NRI are laid down by FEMA Regulations, notified vide RBI Notification No. FEMA 21/2000-RB. NRIs and PIOs can acquire immovable property in India in the following ways: 

1) By way of Purchase

An NRI/PIO can acquire a residential or commercial property by purchasing it under the general permission granted by the RBI. Payment for purchasing the property should be made only out of funds remitted to India through normal banking channels or funds held in NRE/ FCNR/NRO accounts maintained in India. No payment can be made outside India.

A declaration is required to be submitted to Reserve Bank of India (Central Office) about the real estate acquisition of property by an NRI in form IPI 7 within a period of 90 days from the acquisition/final payment of purchase consideration, along with a certified copy of the document as evidence of the transaction and Bank certificate stating the amount paid.

2) By way of Gift

An NRI/PIO can acquire immovable property (only residential/commercial property) by way of gift from a resident of India, an NRI or a PIO. Agricultural land/plantation property/farmhouse in India cannot be acquired by way of gift.

       A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.

3) By way of Inheritance

NRIs/PIOs/ foreign nationals of non-Indian origin are eligible to hold immovable property acquired by way of inheritance from a resident Indian / NRI or PIO. However, they would need specific approval from the RBI to hold any immovable property in India if acquired from a person resident outside India.

It is mandatory that the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange regulations applicable at the time of acquisition.

       Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan are required to seek specific approval of the Reserve Bank of India before being able to inherit any immovable property in India.

Documents Required for Acquisition of Property

1. Title Deed
2. Tax Receipt
3. Bills
4. Encumbrance Certificate
5. Document showing measurement of Land
6. Registration Papers

Key facts on acquisition of property by NRI by Purchase/Gift/Inheritance

1. There is no lock-in period now for any acquisition of immovable property.
2. All the sale proceeds of residential/commercial property received by way of gift by NRI should be credited to NRO accounts only.
3. Sale proceeds of property inherited from a resident Indian not exceeding USD 1 million can be remitted abroad in one calendar year.
4. Sale proceeds of property inherited from an NRI cannot be repatriated.
5. Sale proceeds of residential/commercial property received by way of gift by NRI/PIO can only be credited to NRO account.
6. NRIs can seek an agreement with their relatives in the form of Power of Attorney in their resident country. This way, in their absence their relatives can represent them during the proceedings.

Repatriation Guidelines..A common doubt with most of my clients..Particularly Realty Investors

Repatriation is the transfer of funds from India to accounts held overseas. Repatriation pertaining to Real Estate in India is in accordance with the provision of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 as defined in Sections 6 and 47 of FEMA, 1999 and Notification No. FEMA 21/2000-RB dated May 3, 2000.

Funds on which Repatriation is allowed in India:
If you are a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO), you can avail of repatriation facility on:

·       Sale proceeds of immovable property acquired in India out of your repatriable funds, without any lock-in period. Sale proceeds of immovable property bought from foreign currency.

·       Assets acquired by way of Inheritance/legacy/bequest, without any lock-in period.

·       Deposit with a bank or a firm or a company from funds brought from abroad.

·       Provident fund balance or superannuation benefits.

·       Amount of claim or maturity proceeds of insurance policy.

·       Sale proceeds of shares, securities.

·       Refund of application/earnest money/purchase consideration made by house-building agencies/seller on account of non-allotment of flats/plots/cancellation of booking/deals for purchase of residential/commercial properties along with interest and net of taxes, if original payment is made out of NRE/FCNR (B) account/inward remittances.

However, all persons, whether resident in India or outside India, who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan, require prior permission of Reserve Bank for transferring any immovable property in India.

Conditions for Repatriation of Sale Proceeds from property:

1.    Property against which remittance is sought should be acquired as per the applicable laws and in accordance with the provisions of foreign exchange law in force.

2.    Documentary evidence in support of the acquisition of the funds/assets proposed to be remitted should be produced. It is required by banks for the same.

3.    Undertaking and Certification relating to tax compliance are mandatory.

4.    Proceeds should not exceed the amount paid for acquiring the property.

5.    Subject to fulfillment of few conditions, proceeds should be credited to NRE account.

6.    Repatriation of sale proceeds of residential properties is restricted to two such properties.

7.    Repatriation of sale proceeds of immovable property acquired out of Rupee fund (inward remittance) is available only if the property is held for a minimum period of 10 years. If such a property acquired out of Rupee fund is sold within 10 years, remittance can be made, only if the sale proceeds have been held by the NRI/PIO for the balance period in an NRO Account (Savings/Term Deposits) or in any other eligible security provided such investment is traced to the sale proceeds of the immovable property.

8.    Repatriation should be done via 'authorised person'. Authorised person means an authorized dealer/offshore banking unit or any other person for the time being authorised to deal in foreign exchange or foreign securities, by the RBI.

9.    Citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan shall require prior approval from RBI to apply for repatriation.

NRI banking norms:
Repatriation of sales proceeds of an immovable property is allowed by banks, subject to fulfillment of the following points:

1.    Sale proceeds of property purchased with native currency by an NRI do not qualify for repatriation.

2.    Sale proceeds of property purchased with foreign currency qualifies for repatriation amount not exceeding $ I million, subject to two conditions:

o   Remittance for the concerned property was done outside India, in accordance with regulation of FEMA, 1999.

o   Property in question is registered with RBI within 3 months of purchase.

3.    Real Estate acquired as gift by NRI qualifies for repatriation and can be repatriated to only NRO account held by him.

4.    Inherited property can also be repatriated on producing proof of inheritance, undertaking by the remitter and a certificate from a Chartered Accountant. This is subject to RBI approval.

5.    Property purchased on loan also falls under repatriable investment if the loan has either been repaid per norms or an undertaking by a Chartered Accountant is enclosed.

Channels of Repatriation
NRI Accounts:

·       NRE (Non Resident External Account) account (Savings/Current/ Fixed Deposits): Is freely repatriable (principal and interest) and does not require prior permission from RBI. Many banks like HDFC, PNB, SBI, ICICI et al offer NRE facilities.

·       FCNR (Foreign Currency Non Resident Account) (Deposits): FCNR Deposits are fully repatriable (principal and interest). And the entire deposit is exempt from tax. All major banks HDFC, ICICI, SBI offer this facility.

·       NRO account Non- Resident Ordinary Account(Savings): NRO deposits are not repatriable (principal) except on current NRI income like rent, dividend, pension, etc. and remittances indicated under "Repatriation of NRO Funds" only after payment of taxes due in India. Interest is freely repatriable. The NRI may remit up to USD one million per calendar year.

·       RFC account (Resident Foreign account): This account is available for returning Indians only, that is Indian who have permanently returned to India after holding NRI status. Funds can be repatriated on a need basis.

Repatriation Procedure:
To apply for repatriation, an NRI should make an application in the prescribed format to an authorized dealer only, that is, a bank/dealer authorised to deal in foreign exchange by the RBI. The authorized dealer on satisfying itself with the particulars/documents submitted by the concerned NRI may allow the repatriation of the same.

The documents required while seeking Repatriation:

1.    Application for permission in prescribed format in Form IPI 8 to repatriate the original investment made in immovable property held  in India.

2.    Certified copy of the purchase agreement.

3.    Certified copy of the sale agreement.

4.    Original bank documents proving that the purchase has been made from abroad or from an NRE account held by the seller.

5.    Proof of the Capital gain tax, if any, deducted at source and paid to the Government by the purchaser of the property

Got an I-T notice? No need to panic Gagan Pahwa and Vinay Mangla from Ernst & Young explain ways to tackle an enquiry notice from the income tax department

THE income tax authorities for various reasons may issue a tax enquiry notice. Sometimes you may also receive a notice despite filing your returns.
   

Issue of notice where a tax return has not been filed: Salaried employees are required to have their returns filed by July 31, each year for the income earned by them during the previous financial year. To illustrate: For the financial year April 1, 2006 up to March 31, 2007, the tax return was due by July 31, 2007. In case no return of income has been filed but the tax officer feels that a return should have been filed, he or she may issue a notice under Section 142(1) of the Income Tax Act requiring such person to file a return of income within the specified time.

Tax notice where a tax return has been filed: It is possible to get a notice from the tax officer, even if you have duly filed your tax return, in the following situations:

A tax enquiry notice is most commonly issued for audit of income and expense details disclosed in the return of income, commonly referred to as “ax scrutiny proceedings”. under tax scrutiny proceedings, a notice is issued under Section 143(2) of the act if the tax officer believes that less income has been disclosed or excessive claims have been made of losses, exemptions, deductions, allowance or relief in the return. The tax payer is normally requested to answer certain questions, file documents as evidence and provide additional information. However, such a notice has to be issued within a certain period; it cannot be issued to the tax payer after the expiry of twelve months from the end of the month in which the return of income was filed.

There is also a provision under the act, which empowers a tax officer to initiate audit proceedings by issuing a notice under section 148 for the past six assessment years for which scrutiny proceedings may or may not have been conducted, subject to satisfaction of certain conditions. These proceedings are commonly referred to as “reassessment proceedings” and are initiated where the tax officer has reasons to believe income which should have been taxed has escaped audit i.e. no taxes have been paid on such income by the tax payer. For instance: As on November 1, 2007, reassessment proceedings can be initiated for assessment year 2001-02 (financial year April 1, 2000 to March 31, 2001), and onwards.
In cases, where a taxpayer has filed his return, and a tax officer requires certain additional information, a notice may be issued under section 142(1) of the Act. A tax notice may also be issued where a return is found to be defective. In such a case, the tax payer is issued a notice under section 139(9) of the act requiring the taxpayer to rectify the defect within 15 days from the date of notice or such extended period which the authorities may permit. To illustrate: if you have missed filling in all the details in the required columns in your tax return, the return would be treated as defective and you would have to rectify the error.
 

Even a third party can be served a notice to collect information about you. For example, the tax officer can issue notice to a bank asking for the account details of a person who has an account with the said bank.
   

How to respond to a tax notice? In relatively simple issues, you may attempt to handle the situation on your own but in complex cases, please go to your tax advisor. Here are some action points:
   

Verify the validity of notice as regards whether the same has been issued within the time limit prescribed for issue of such notice and whether appropriate procedures have been followed while issuing the notice. Typically, the act provides for a limitation period for issuance of all kinds of notices.
   

Go through your past returns, assessments orders, financial statements before responding to the tax officer. Be aware of the deadline for responding to a notice or attending a tax hearing, as any non-compliance may be viewed as non-cooperation and may adversely influence the outcome of the enquiry proceedings.
 

Unless the notice or summon requires personal appearance of a person, the details/ information may be furnished via post or through an authorised representative (your tax advisor). So next time you receive a tax enquiry notice don’t panic. Just follow the above procedures.

Home is where many tax saving options still dwell ..Interesting Read, by Bakul Chugan

Buy a home, go for joint ownership if you are two salaried persons, buy a second property, or even sell the existing one...if you plan well, there are various options to save tax on hard-earned money

THE Indian economy has been witnessing a boom in the recent past. However, rising property prices and growing interest burden on home loans are worrying buyers. The Budget has not offered any relief, but you can still make ample use of the existing provisions to save substantially on property investments. Here’s how….
   
BUYING A HOUSE   

Owning a house is not just a dream but
   a necessity, and there are several tax
   benefits as well. However, when buying a house, you would do well to consider the following.
   (a) It’s always advisable to go in for a housing loan. Interest paid on home loans can be deducted from your taxable income up to a maximum of Rs 1.5 lakh. This can be a double bonanza in the case of joint ownership. If the joint owners equally bear the interest burden, each gets a deduction up to Rs 1.5 lakh.
   However, the total deduction cannot exceed the actual interest paid by the joint owners. So, if the total yearly interest liability is, say Rs 4 lakh, and the property is equally owned by three people, then each gets a deduction of Rs 1,33,333.
   (b) Principal repayment up to Rs 1 lakh is allowed as a deduction from your taxable income under Section 80C, provided the loan is borrowed from a recognised financial institution.

OWNING TWO OR MORE HOUSES

These days it’s not uncommon to see people owning more than one property. While interest paid on loan taken for a single property is eligible for deduction up to Rs 1.5 lakh only, no such ceiling is prescribed for a new loan taken to purchase a second property. Thus, if your rental income from the second property is Rs 4 lakh and the interest expense on loan taken for the second property is Rs 2.5 lakh, then your income from house property shall be calculated as below:
By claiming deduction for the entire interest expense of Rs 2.5 lakh, you can substantially reduce your tax liability.
Had there been no deduction of interest expense, you would have had to pay tax on Rs 2.8 lakh instead of Rs 30,000.
However, if your second house is lying vacant, generating no rental income, you can still claim deduction for the interest paid. There will nevertheless be a notional rental income and the interest will be deducted from this income.

SELLING PROPERTY   

To minimise tax outflow while selling a property, take into account the following.
   (a) A property or house held for under three years is termed as a short-term capital asset and does not attract any tax incentive. However, if you sell the property only after three years, it is a long-term capital asset, which is eligible for some tax relief.
   (b)Selling property attracts capital gains tax. However, if you invest the proceeds from selling the property into buying or constructing another house, the taxman exempts you from paying taxes. But keep in mind the following:

• If you intend to purchase a new house, do so either one year before or within two years of selling your existing property.

• If you are constructing a new house, then ensure that it is done within three years of the sale of the earlier property. You can start construction even before the transfer of the existing property. However, ensure that it is completed within the stipulated time.

• If you have already sold your property, and could not acquire a new house before the due date for filing tax returns, you can deposit the money in the ‘capital gains deposit account scheme’ with any nationalised bank.
   (c) Even those who do not want to buy a new house can avail of some tax benefits. All you need to do is invest the proceeds from the sale of the property in capital gains bonds issued by NHAI or REC within six months of the deal. The maximum investment permitted in such bonds is Rs 50 lakh, and these bonds can be redeemed only after three years from the date of investment.

Getting Started On Your Estate Plan by Steven Merkel,CFP®, ChFC - courtesy - investopedia

Estate planning is more than simply having a will. It is a continuous planning process done to alleviate the financial impact of your death on those you leave behind. By spending just a few hours and dollars now, you can save your loved ones or beneficiaries from paying as much as a 47% estate tax. But a well-constructed estate plan may not only reduce the tax bill, but also help your loved ones understand, resolve and prepare for many of the issues that arise when settling an estate. We'll show you where to start.

Dying without a Will - Dying without a will is known as dying intestate. If this were to happen in the U.S.intestate succession laws would come into play, and your relatives would have to go through probate to claim ownership of assets, perhaps even fight over assets. The state would determine how your property passes to your heirs. If no heirs fit the state's formula, your assets may become property of the state. A will can help you avoid the pitfalls of dying intestate; however, even if you have a will, your assets will still be subjected to the timely and costly probate process (court involvement).

How a Will Can Help
A will primarily allows you to control the distribution of your assets and state your final wishes.
One very important advantage of a will is that it allows you to recommend a guardian to care for your children or other dependent beneficiaries in the event of your death. Because this is an overwhelming responsibility, you should select your guardian(s) carefully and also obtain their consent before listing them in your will. Although the final decision concerning guardianship is made by the court, the courts give a lot of weight to the parent's decision in the will.

Other important items on your will are clauses clarifying the will and its purpose. In the exordium clause, for instance, you state your name and residence, and officially declare the document a will. Be careful to note in this clause that the will supersedes all previous wills, making them null and void. In the will you should also name the executor/administrator of your estate and how you would like that person to distribute your assets, including how all your debts, taxes and funeral expenses are to be paid. To avoid family disputes, you may want to add a non-contestability clause, which states that if any beneficiary contests the will, his or her share becomes null and void. Of course, a non-contestability clause is not suitable for every family's circumstance.

How to Start on Your Estate Planning
Now that you understand the importance of having a will, here's a list of steps that gives an overview of the estate planning process:

Make a list of all your assets and liabilities.

Open a family discussion of who should be the guardian for your children.

Check and update your current beneficiaries (those designated for IRAs, life insurance, etc).

Review the current federal estate tax exemption limits (discussed below).

Determine the distribution of your assets upon your death (family, charity, etc).

Discuss your funeral arrangements with your spouse or family.

Seek the assistance of a certified estate-planning attorney.

A simple will may cover all your estate planning needs if the value of your estate falls materially below the estate-tax exclusion amount. The federal estate tax is an excise tax levied on the transfer of a person's property that exceeds a certain amount at the time of that individual's death. If your estate is worth more than the tax exclusion amount, the tax can be hefty. As such, you really need to take a serious look at your personal situation, and, if your estate is more than the tax exclusion, look into more estate-reduction and planning techniques, which will help your beneficiaries avoid the estate tax (we discuss these techniques further below). Keep in mind that direct transfers to your spouse are not taxed - these assets are not taxed until s/he dies (this is called a marital deduction).

Estate-Reduction and Planning Options
Let's take a look at some estate-planning tools and estate-reduction techniques:

Use trusts to maximize the exclusion and avoid probate. Trusts help you do so because they are designated to a beneficiary.

Take advantage of charitable donations to reduce your estate.

Use your estate to pay family educational and medical expenses as these are tax deductible.

Loan assets to family members to minimize your estate.

Buy life insurance to help pay estate taxes, but remember life insurance will provide payouts only under certain conditions (executor or beneficiary should be owner).

Utilize annual gifting (up to $12,000 per person per year) to minimize taxes and maximize the value to your loved ones on your will.

Set up durable powers of attorney.

Establish your funeral and burial plans.

Seek professional help from your financial advisor, an estate-planning specialist or a lawyer specializing in estates.

Sometimes changes in your life - such as a sudden increase in wealth, a new marriage or remarriage, the birth of a child, a serious illness or a death in the family - can trigger the need for an estate plan evaluation. All of these factors could affect your current plan and require revisions or additions.

Summary
Estate planning is truly for the benefit and care of your loved ones, making the legal and financial issues easier to deal with if you pass away. Since planning for death is not always a No.1 priority, we tend to postpone setting up the legal documents. But at a minimum, every competent adult should have a will drafted. The problems associated with probate, creditors, con artists, lawsuits, lawyers and death taxes can all prolong the settlement of your estate. Don't wait to establish your plan until you've heard someone else's horror stories.

by Steven Merkel
Steven T. Merkel, CFP®:, ChFC, is the vice president of portfolio management for Financial Advisory Consultants LLC in Naples, Fla. Steve is a former U.S. Army air defense artillery officer and has been giving financial advice for more than 12 years. He is a Certified Financial Planner® practitioner and a Chartered Financial Consultant. Merkel has been featured and widely quoted in numerous publications including The New York Times, BusinessWeek, Entrepreneur, Consumer Reports, Investment News, Financial Planning Magazine and Fidelity's Stages Quarterly. He enjoys fishing, golf, military history, Miami Hurricane football and relaxing on the beaches of South Florida

Categories Financial management, asset management, investment banking, investment management, portfolio management, financial planner, personal banking, private bank, private banking, what is private banking, what is wealth management, wealth management, private banks, about wealth management, fund management, investment companies, financial advisor, asset management company, banking management, asset managers, certified financial planner, financial advisors, wealth creation, investment in, investments in, direct investment, capital investment, investment in company, Wealth management, investments in India, taxes in india, direct investment in india, Investment in business, investment in companies, wealth in india, financial advisors, direct investments,portfolio investment, investment and finance, capital investments, family office, foreign companies in india, foreign investments in india, foreign company in india, the family office, what is family office, capital investors, investment in assets, fdi investments in india, portfolio investments, investments in property, Praveen Saanker, Praveen saanker, Praveen

.

NRI Taxation in India - Salaries, House/Property, Capital Gains & Business Income

NRI Taxation In India

Introduction:
Under the Income Tax Act, the residency of an individual decides the scope of payable income tax. The residency of the person in the previous year along with the location of the income accrued in that year determines whether a person will be charged income tax as per a resident Indian or a non-resident Indian.

The definitions of a NRI are different under FEMA and Income Tax Act, enabling the individual to be a non-resident of India under one law and resident of India under another.

Taxation for Non-Resident Indians depends upon his residential status under the Income Tax Act. Any income that is

1. received or deemed to be received in India during the financial year
2. accrued or deemed to be accrued in India
3. accrued or deemed to be accrued outside India but its first receipt is in India forms part of the NRI income tax that he is due to pay.

The income of an NRI can be in the form of:

1. Salaries
2. House Property
3. Capital Gains
4. Business Income

1. Salaries

Depending on whom he is getting his salary from, an NRI has to either pay his income tax or be tax free. Any income in India or by an Indian is taxable whereas income coming from a foreign entity is non-taxable. Superannuation funds and pension are also taxable.

2. House Property - Taxation on Property Transaction

An immovable property (commercial/residential) owned by an NRI is subject to NRI taxation rules and regulations. The NRI taxable income includes the sales proceeds, rent and one of two residential properties as if the property had been let out even if the both are kept vacant. No tax is due on purchase of an immovable property.

The Indian tax laws allow a general deduction of 30% on the rental income and also a deduction towards interest subject to certain conditions.

Non Taxable Properties:
The following categories of property enjoy exemption from taxation:

1. Income earned from a farm house that is been used for agricultural purposes.
2. Income earned from a property used for some charitable purposes.
3. Property used for self occupation. If such a property is being used for business purposes, then the income earned is taxable under the "Business Income" head and not under head "House Income".

3. Capital Gains:

Capital gains are the profits earned when a property owned by NRI and situated in India is sold for a profit. Capital gains can be categorically divided into two types:

       Short Term

       Long Term

       A Short-Term capital gain is the gain on immovable property being sold within a period of 36 months from the acquisition. The liability for taxation is at the rate of 30%.

       A Long-Term capital gain, on the other hand, is on an asset that has been held for more than 36 months by the NRI. The tax thereon would be at the rate of 20%. The tax-inflation index decides the tax on long-term capital gains.

There is no tax on re-investment of long term capital gains and also when it is in the form of shares and securities.

4. Business Income:

Any income generated by any business venture that the NRI engages himself in India is taxable under the Income Tax rules of India applicable to an NRI. It could be selling an asset (metal like gold, silver) for business profit, profit from partnership with an Indian individual or company, cash assistance, payment received in lieu of services/products provided, bonus, interest et al.

Ready Reckoner for NRIs:

       Tax is computed during the financial year, i.e. a period of 12 months from 1st April to 31st March.

       Keep track of the number of days you stay in India from year to year and check the same before making the next trip to India.

       In the 1st year of leaving India for employment outside India, ensure that you leave before 29th September. Otherwise total income of the financial year (including the foreign income) will be taxable in India if it exceeds the basic exemption limit.

       During the last year of your stay abroad before coming back to India, make sure that you come back on or after Feb 1st (or Feb 2nd in case of a leap year) since arrival before this date will make your stay in India exceed 59 days. However, a person whose stay in India in the preceding four (4) previous years does not exceed 365 days, he may return after September 30th of the relevant year without loss of his non-resident status.

       The month for filing returns including NRI tax return is July of the subsequent financial year. An NRI is not required to file the ROI if his assets fall under Specified Assets list (Long Term capital gain, debentures, shares, securities, income form charitable sources) as defined under Section 115 C of Income Tax Act.

India has seen tremendous changes in the taxation scene, in terms of exemptions/concessions for NRIs. The repealing of Gift Tax, exemptions under the Wealth tax, exemption of tax on income from Capital Gains and a host of other changes are indeed very encouraging

Categories Financial management, asset management, investment banking, investment management, portfolio management, financial planner, personal banking, private bank, private banking, what is private banking, what is wealth management, wealth management, private banks, about wealth management, fund management, investment companies, financial advisor, asset management company, banking management, asset managers, certified financial planner, financial advisors, wealth creation, investment in, investments in, direct investment, capital investment, investment in company, Wealth management, investments in India, taxes in india, direct investment in india, Investment in business, investment in companies, wealth in india, financial advisors, direct investments,portfolio investment, investment and finance, capital investments, family office, foreign companies in india, foreign investments in india, foreign company in india, the family office, what is family office, capital investors, investment in assets, fdi investments in india, portfolio investments, investments in property, Praveen Saanker, Praveen saanker, Praveen