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Anil

Anil Rego  |330 Answers  |Ask -

Financial Planner - Answered on Aug 26, 2022

Anil Rego is the founder of Right Horizons, a financial and wealth management firm. He has 20 years of experience in the field of personal finance.
He’s an expert in income tax and wealth management.
He has completed his CFA/MBA from the ICFAI Business School.... more
Subbiah Question by Subbiah on Aug 26, 2022Translate
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I am an NRI. So far I have not filed any income tax. My Indian income is INR 19000 per month through rental income.

I am having a resident demat account and having stocks. I have few MFs for which money is deducted from my wife's resident bank account. My wife is not working and she is with me. I am also having SSY for my daughters and continuing.

Is it okay to have the above accounts being an NRI? Can you please advise course correction if needed?

Ans: NRIs need to convert their accounts to a Non Resident Account status for all their bank accounts and also for their mutual fund and demat accounts. You can approach the respective financial institution to change your status. It may be noted that for NRIs, tax will be deducted at source.

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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Anil

Anil Rego  |330 Answers  |Ask -

Financial Planner - Answered on Apr 06, 2022

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Shall appreciate your expert advice based on the following facts: Am 59 years old & came back to India on 6th November ’20 after my stint with an MNC overseas, for 14 years & 9 months. What is going to be my status for the previous financial year viz. 2020-21 as well as current financial year i.e. 2021-22? All my overseas salary up to 5th of November ’20 were transferred to my NRE Rupee or US $ fixed deposits. I do have some small income in the form of dividend on shares, interest on ordinary rupee FDs, house rent etc. Most probably, I will not be working abroad any more. What will be the tax treatment of my NRE deposits which are going to mature in future or have been renewed after my return to India in November’20? As per my standard instructions to the banks, the same are being auto-renewed on due dates. I would like to know if there are any specific investment products other than NRE/RFC FDs, for the NRIs whose status has changed in the current fiscal year or is going to change in near future. Most all my savings are in INR only, but classified under NRE deposits.
Ans: The status of FY2020-21 would be NRI and the status in FY2021-22 would be RNOR (Resident but not ordinarily resident). So you need to convert the NRE to resident account immediately after returning to India. If you fail to convert your NRE account within 3 months of the return, it will be considered as a violation of Foreign Exchange Management Act (FEMA) and attract a penalty.

After you return to India, any interest earned on NRE account will be taxable. You can opt to transfer your funds from NRE account to RFC account upon return

Though there are no specific products for returning NRIs, there are a whole range of investment options available for you apart from Bank Deposits. The most common are mutual funds, bonds, stocks, insurance, etc. You can choose to invest based on factors that suit you including risk, return, liquidity, etc. Options like PPF that are not available for NRIs become available when your status changes to Resident Indian.

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Mihir

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Tax Expert - Answered on Nov 17, 2022

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I am staying in India from around 4 years and working as a consultant in a Mexican Company (previously I was residing there, but now working from India) and getting income from Mexico. I am also paying tax on my abroad income I am getting in my NRO/ NRE account with Axis Bank. I want to know if I am an NRI or Resident Indian? Whether, I can open Mutual Fund account with NRI status or Resident India status? What will be the tax implications? Please guide me as I am not getting proper explanation.
Ans: Based on available details, you seem to be resident and ordinary resident for income tax purpose.

You can always check status at calculator provided at income tax website (external link)

Accordingly, you should inform bank about change in residential status immediately and change the type of account (NRO/NRE Account).

Also you have to open account as resident for MF and tax implications will arise at the time of transfer of mutual fund units. Tax rate will depend on type of fund (equity based or debt based) and period of holding.

Mutual funds whose portfolio’s equity exposure exceeds 65% are equity funds.

Equity funds held for 12 months or more are considered as long term, whereas it is 36 months in case of debt funds.

Short term equity funds are taxed at 15% and debt funds are taxed at slab rate.

Long term equity funds are taxed at 10% (if capital gains of exceeds Rs 1 lakh) and debt funds are taxed at 20% after indexation.

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Hello Sir, Don't disclose my name, I am working in boarding school from last 2 year's, last year principal changed and he is giving lot of work (harassing staff ) so around 50% of staff left the school. he is not appointing new staff also. hardly 2-3 staff he has appointed. In my department 3 staff ware there now I am alone, he is not appointing any one, so I am alone handling all the classes. he has increased the work also. So I decided to leave the work and I got the work also. I have sent my resignation letter through mail. In my appointment letter they have mentioned “During the probation period your service may be terminated by ONE MONTH NOTICE on “either side or Salary in lieu of notice” and The relieving date in all circumstances will not be earlier than the last day of the academic year unless the school terminates. if you are working on any assignment when you tender your resignation such assignment must be completed to the satisfaction of the school before your services will be released. As allocation of subject teaching is a duty allocated for the academic year the reliving date will not be earlier than the last date of the academic year in which the resignation is tender. The school does not encourage mid term session dis continuation of services. School academic year will ends in April. At the time of appointment they have taken all my original certificates. But when I sent my resignation with one month notice period they replied as per your request, you will be relived after the completion of required formalities and work as per service rules. But, yet they are not mentioning what are the work to complete. After one month notice period immediately I have to join my new job. otherwise i will miss my opportunity. orally simply they are extending my date. At present they have extended 15 days after my last day of my notice period. kindly guide me how to solve the problem, get back my originals and join my new job smoothly. Regards
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