I’ve invested in US shares and coming again to India. Income tax rule defined

I’m a male NRI who retired and got here again from US to India for good in Aug 2019 and am retired since then. I’m a US citizen. My age is 66. Almost all my cash is invested in US in shares. My complete deposits in banks in India is lower than $10,000. I personal a home in Mumbai. What is my present immigration standing? Am I at the moment “Resident but not ordinary Resident”? Should my financial savings Accounts in Indian be NRO and NRE financial savings accounts or common financial savings accounts? What are the foundations relevant to me relating to tax filings? Which nation tax returns do I’ve to file? My revenue is zero since I moved however nonetheless I wish to file US taxes as I’ve earlier capital losses in shares and for withdrawals from my IRA account. Is it a requirement that I’ve to file tax returns in India and/or US tax returns? If sure, what Indian tax kinds I’ve to make use of and what are Indian tax deadline dates for submitting the revenue tax returns? I nonetheless put money into US shares and get some dividend and curiosity on them. I additionally get some curiosity in my Indian financial savings accounts. Are there any reimbursement guidelines if I file taxes in each international locations?

Answer: You have been “resident but not ordinary resident” for 2 monetary years i.e. 19-20 and 20-21. From monetary yr 21-22 you’re a correct resident of India for tax functions. You can maintain your investments outdoors India so long as you need. Since you’ve belongings outdoors India and are a tax resident of India, it’s a must to mandatorily file an Income Tax Return (ITR) in India regardless of whether or not you’ve any revenue in India or not and must disclose particulars of all you overseas belongings owned in addition to financial institution accounts maintained by you outdoors India in your ITR to be filed in India. You can use ITR 2 for submitting your taxes in India in case you wouldn’t have any enterprise revenue. The due date for submitting your ITR in India is thirty first July yearly nevertheless, you may file it by thirty first December of the following yr with late submitting payment.

Residential standing below Foreign Exchange Management Act (FEMA) and revenue tax legislation is set otherwise as the aim of each is completely different. You had turn into a resident of India below FEMA the day you landed in India with intention to spend your retirement days in India. So you need to have gotten all of your financial institution accounts designated as extraordinary accounts from NRO/NRE when you got here again to India for good. Since you’re a tax resident of India, your international revenue will get taxed in India. However, you may declare tax credit score for taxed paid in US on the revenue which is being taxed in India. I’m not conscious concerning the requirement to file your revenue tax assertion in US however I really feel you’ll have to file your tax assertion in US as nicely as a result of you’ve revenue out of your investments in US.

Balwant Jain is a tax and funding skilled and will be reached on jainbalwant@gmail.com and @jainbalwant on Twitter

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