Income tax implications for NRIs coming again to India for good

I’ve been an NRI for the final 30 years and presently stay in Hong Kong (HK). I’m a salaried worker and pay all taxes legally and accurately in HK. I’ve financial institution accounts in Hong Kong the place I preserve my earnings in USD and Hong Kong Dollars. I even have investments in Mutual Funds and shares in USD produced from my tax paid wage and held in the identical banks (performing as brokers) the place I keep my financial savings accounts. Both these banks viz. HSBC and DBS in Hong Kong the place I’ve financial savings and wealth administration accounts have presence in India. I have already got NRE & NRO accounts in HSBC India however would not have any account in DBS India as but. 

My queries: 

a) I’m planning to relocate to India however would additionally like to know what month is finest for such relocation to get most standing as NRI after relocation. For what number of years I can keep such NRI standing? 

b) What occurs to my funds in my HK financial institution accounts? How lengthy can I preserve sustaining them with out remitting to India in USD (can preserve solely in Fixed deposit in India) or changing to INR? 

c) I earn dividends from my wealth administration accounts in HK. In case I can keep my Bank accounts in HK , will this dividend earnings earned in Foreign change must be declared as international earnings and taxed in India ? What is the tax price for such earnings? From which yr I must declare and pay tax on this dividend earnings?  

An NRI returning to India must be in India for a interval of lower than 182 days in mixture through the monetary yr to be a non-resident for that yr.  A non-resident coming again to India for good can stay “a resident however not bizarre resident” for max of two years. For a non-resident solely his Indian earnings get taxed in India however for a resident however not bizarre resident his Indian earnings in addition to earnings earned from a supply or enterprise connection in India will get taxed in India. After one ceases to be a resident however non bizarre resident, his international earnings turn out to be taxable in India.

As far as investments mendacity exterior India are involved, there isn’t a restriction as to the time as much as which you’ll be able to retain them exterior India. So there isn’t a want so that you can eliminate these investments quickly and produce the cash into India. Once you get the cash again into India you possibly can both preserve the identical in a Resident Foreign Currency (RFC) account which might any time be remitted again out of India or use the identical in India the way in which you would like. However, when you turn out to be a resident for tax functions, you’ll have to declare all of your international belongings and investments in your ITR.

Your dividend earnings out of your investments exterior India will stay tax free for 2 monetary years and publish that you’ll turn out to be a resident of India and due to this fact your international earnings together with dividend earned in international change will get taxed in India. The dividends are handled like your common earnings and get taxed on the slab price relevant to you.

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

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