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US Citizen with $271k income, wants India taxes for pension & rental

Ramalingam Kalirajan |8815 Answers |Ask -Follow

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

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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

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