Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Mihir

Mihir Tanna  |792 Answers  |Ask -

Tax Expert - Answered on Nov 17, 2022

Mihir Tanna has more than 10 years of experience in direct taxation, including filing income tax returns.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Sunil Question by Sunil on Nov 17, 2022Translate
Listen
Money

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.

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.
Money

You may like to see similar questions and answers below

Anil

Anil Rego  |330 Answers  |Ask -

Financial Planner - Answered on Apr 06, 2022

Listen
Money
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.

(more)
Latest Questions
Moneywize

Moneywize   |58 Answers  |Ask -

Financial Planner - Answered on Feb 24, 2024

Asked by Anonymous - Feb 23, 2024Translate
Listen
Money
What are balanced advantage funds and would you recommend how I should go about investing in such funds?
Ans: Balanced Advantage Funds are a type of mutual fund that dynamically manages the allocation between equity and debt instruments based on market conditions. These funds aim to provide investors with a balance between growth (through equity exposure) and stability (through debt exposure). The allocation between equity and debt is adjusted by fund managers based on various factors such as market valuations, interest rates, and economic indicators.

Here's a breakdown of the key features and considerations for investing in Balanced Advantage Funds:

1. Dynamic Asset Allocation: These funds have the flexibility to shift allocation between equity and debt depending on market conditions. When equity markets are expensive or overvalued, the fund manager may reduce equity exposure and increase allocation to debt instruments, and vice versa.

2. Risk Management: Balanced Advantage Funds tend to offer lower volatility compared to pure equity funds due to their ability to switch between asset classes based on market conditions. This can potentially reduce downside risk during market downturns.

3. Goal-based Investing: They can be suitable for investors with medium to long-term investment horizons who seek a balance between capital appreciation and capital preservation. These funds are often used for goals like retirement planning or wealth creation with a moderate risk profile.

4. Professional Management: Investors benefit from the expertise of professional fund managers who actively manage the asset allocation and investment decisions based on thorough research and analysis.

5. Tax Implications: From a taxation perspective, gains from equity investments held for more than one year are taxed at a lower rate (long-term capital gains tax), whereas gains from debt investments held for more than three years are taxed as per the investor's income tax slab. Balanced Advantage Funds may offer tax efficiency due to their equity exposure.

6. Expense Ratio: Investors should consider the expense ratio of the fund, which represents the annual fees charged by the fund house for managing the fund. Lower expense ratios can enhance returns over the long term.

As for whether you should invest in Balanced Advantage Funds, it depends on your investment objectives, risk tolerance, and financial goals.

If you're seeking a balanced approach with the potential for higher returns than pure debt funds but with lower volatility compared to pure equity funds, then these funds could be suitable for you. However, it's essential to consult with a financial advisor who can assess your individual circumstances and recommend the most appropriate investment strategy.

If you decide to invest in Balanced Advantage Funds, you can do so through various platforms such as mutual fund distributors, online investment platforms, or directly through the fund house's website. Here's a general guide on how to invest:

1. Research: Understand the different Balanced Advantage Funds available in the market, their investment objectives, performance track record, and expense ratios.

2. Select a Fund: Choose a fund that aligns with your investment goals, risk tolerance, and time horizon.

3. KYC Compliance: Complete the Know Your Customer (KYC) process as required by regulatory guidelines. This typically involves providing identity and address proof documents.

4. Investment Process: Decide on the mode of investment, whether lump sum or systematic investment plan (SIP), based on your convenience and investment strategy.

5. Online Platform or Distributor: If investing through an online platform, create an account and follow the instructions to invest in your chosen Balanced Advantage Fund. If using a mutual fund distributor, approach them with your investment decision, and they will assist you with the investment process.

6. Monitor and Review: Keep track of your investments periodically and review your portfolio to ensure it remains aligned with your financial goals.

Remember that all investments carry some level of risk, including the potential loss of capital. Diversification and a long-term investment approach are generally recommended to mitigate risk and achieve your financial objectives.
(more)
Anu

Anu Krishna  |725 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Feb 24, 2024

Asked by Anonymous - Feb 21, 2024Translate
Listen
Relationship
Good Morning, We are married for almost 27 years and at various stages of my wife like, beginning days when Girls had dream of her happy married life beginning, honeymoon, pregnancy, fostering the child, mid-age crisis and now Menopause I have been very unfair & sometime very cruel to my wife. I am tryint to please her in my possible ways but whenever I am planning something exciting & pleasurable for her it turn out to be flop show & nightmare. I want her to be happy but don't know why it gets spoiled due to one or other reason. Despite of all this she is always giving me chance and prepare herself for new beginning. But now I fear & feel gradually I will become a big liability on her, health wise as I am diabetic and even after taking high dose of medicines it doesn't get controlled. I am worried that though the beginning was not good our end should be Peaceful & graceful. Need your guidance
Ans: Dear Anonymous,
No point revisiting what has already happened. It seems like your wife wants a new beginning; then why not actually plan on how you want your life together to be from now on? What are the things that you have missed out on earlier, bring it all back and slowly start experiencing what life could be living in that harmony...
As for diabetes, getting the right medicine and taking it in the right dosage is important to see a change. Also, exercise, attempt to keep stress levels low and eat right...these help in keeping your blood sugar levels low...
Don't talk about the END when there is a NEW beginning in sight...

All the best!
(more)
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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x