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Investing from Denmark as an NRI moving back to India?

Ramalingam Kalirajan |6287 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 27, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Aug 20, 2024Hindi

Money

I am a 40 year old NRI currently living in Denmark. I have not started any investments in the last 2 years after moving to Denmark and I am looking for a financial advisor/CA who has knowledge of Double Taxation Avoidance Agreement (DTAA) between India and Denmark. Our plan is to move back to India for retirement and therefore would like to invest in India rather than investing here so any help on tax implications and advice on either investing in India or Denmark is better for us.

Ans: It's wise to seek advice on the Double Taxation Avoidance Agreement (DTAA) between India and Denmark. Given your plan to retire in India, investing there makes sense. A Certified Financial Planner (CFP) or Chartered Accountant (CA) with expertise in DTAA can guide you on the tax implications and the best investment options. They can help you navigate both countries' tax systems and optimize your investments for when you eventually return to India.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Ramalingam Kalirajan |6287 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Apr 27, 2024

Question by Arpit - Feb 14, 2024Hindi

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Hi. I am currently living in India and have received a job offer from Dubai. As I plan to shift, I needed to understand some nuances about managing my SIPs, Equity Holdings and EMIs in India. I have following: 1. 80K SIP in 2 DSP Funds and 2 Quant Funds 2. 70K EMI for a home loan 3. About 1Cr equity holding in a demat account Once I move, I will let my flat out on rent. Wanted to understand following: 1. For rent collection, EMI, SIP etc what account is advisable? NRE or NRO? For EMIs, SIPs etc I will have to transfer money from overseas account to Indian account 2. For SIPs - I will have to change my existing account to an NRE/NRO account as well? 3. Demat holdings - is there a separate category of demat accounts for NRIs?

Ans: Moving to Dubai while maintaining financial commitments in India requires careful planning. Here's a breakdown of considerations for managing your SIPs, EMIs, and equity holdings:

Account Choice: For rent collection, EMI payments, and SIP investments, opening an NRE (Non-Resident External) account is advisable. NRE accounts allow you to repatriate funds freely, making them suitable for managing finances while abroad. However, for domestic transactions, you can also consider an NRO (Non-Resident Ordinary) account, which has restrictions on repatriation but facilitates local transactions.
SIP Management: You'll need to transition your existing bank account linked to SIPs to an NRE/NRO account to facilitate seamless fund transfers from your overseas account. Ensure you inform your mutual fund provider about the change in bank details to avoid any disruptions in your SIPs.
EMI Payments: Similarly, you'll need to link your home loan EMI payments to your NRE/NRO account for smooth transactions. Set up standing instructions or auto-debit mandates to ensure timely EMI payments while you're abroad.
Demat Holdings: As an NRI, you can hold equity investments in India through a designated NRI demat account. You'll need to convert your existing demat account to an NRI demat account to continue managing your equity holdings seamlessly.
Tax Implications: Be mindful of tax implications both in India and Dubai. Consult with a tax advisor to understand your tax obligations in both countries and optimize your tax planning strategies.
Legal Compliance: Ensure compliance with RBI regulations and other legal requirements concerning NRI investments and remittances to avoid any regulatory issues.
Communication: Maintain open communication with your banks, mutual fund providers, and brokerages to update them about your NRI status and ensure smooth transition and management of your financial affairs.
By proactively addressing these considerations and seeking guidance from financial advisors and legal experts, you can effectively manage your financial commitments in India while pursuing opportunities abroad.

Ramalingam Kalirajan |6287 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 26, 2024

Asked by Anonymous - May 26, 2024Hindi

Money

I forgot to tick Ask Anonymously. Can you consider my earlier question as Anonymous requester Hello Maheshji Love your service. Thank you. Here is my query. I have been in US for about 25 years and 58 years. I am a US citizen and want to retire in India. Here are my sources of income 1. Company pension - $36,000 /year 2. Dividends from Brokerage - $26,000 /year 3. Dividends from 401k (Tax deferred Account) - $23,000/year 4. US Rentals (Cash flow net of Income & Expense) - $27,000/year Expenses 1. I have a paid home in Blore where I plan to stay. I will refurbish for 250K once I retire. I will have utilities + groceries 2. I will need medical insurance for my wife (50 years( and me Assume this will be income every year or will marginally increase except when I turn 65 and later when my wife turns 65, we may start withdrawing social security income if it exists then. Curious, what will be my taxes in India for current financial year for listed income and expense. (I know, I will be taxed in US as well and US/India has DTAA. If you can help in US taxes great. If not, help me with taxes in India alone) Thank you for your service. Regards your reader

Ans: Current Financial Situation
Income Sources
Company Pension: $36,000/year
Brokerage Dividends: $26,000/year
401k Dividends: $23,000/year
US Rentals: $27,000/year
Expenses
Refurbishment of Bangalore home: $250,000
Utilities and Groceries
Medical Insurance for you and your wife
Taxation in India
Income from Company Pension
Your company pension is taxable in India. The tax rate depends on your total income.

Dividends from Brokerage and 401k
Dividends from 401k are taxed in India. The rate is 20% with indexation. Ensure to declare these in your Indian tax returns.

US Rentals
Rental income from abroad is taxable in India. You need to pay tax as per Indian tax laws.

Double Taxation Avoidance Agreement (DTAA)
India and the US have DTAA. It helps avoid double taxation. Declare all income in both countries. You can claim relief under DTAA.

Medical Insurance
Importance
Medical insurance is crucial. It covers unexpected medical expenses.

Options
Many insurance providers offer plans for senior citizens. Choose a comprehensive plan for you and your wife.

Refurbishment Costs
Budgeting
Plan your refurbishment budget. Ensure it fits within your financial capacity. Consider any additional costs that may arise.

Living Expenses
Utilities and Groceries
Estimate your monthly expenses. Factor in inflation and lifestyle changes.

Final Insights
Your income sources are diverse. This provides stability. Plan your taxes to avoid penalties. Focus on budgeting your refurbishment. Choose the right medical insurance. Regularly review your financial plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Mihir Tanna |942 Answers |Ask -Follow

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Asked by Anonymous - Jul 11, 2024Hindi

Money

Hi, I am a foreign national OCI holder that has been a resident of India. I have local SB accounts and an LLP entity. I pay taxes in India and do not have any other foreign residence. I want to take advantage of social security in my country of citizenship. So I have to receive income in my country of citizenship, and then contribute based on that. So here are my questions: 1) I should be able to pay myself a salary from my LLP entity to a foreign country with just 10% TDS as I have a PAN Card 2) I will still continue to be a tax resident here, so I can take advantage of DTAA and pay taxes only in India correct? any other risks, concerns I need to consider?

Ans: Considering the complexity of query, we will need more details and we need to understand certain facts which can be done in face to face meeting. It is advisable to take service from tax consultant.

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*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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