Taxability relies on supply and place of receipt of earnings

I’m an Indian nationwide working in Singapore. I’ve invested in insurance coverage insurance policies which can be invested into unit trusts in Singapore. Now I plan to return to India for good. In this context, do I must pay capital achieve tax on the income I earn from the mentioned investments?

—Name withheld on request

Taxability in India relies on residential standing, supply of earnings and place of receipt of earnings. Residential standing is set on the premise of bodily presence of a person in India throughout a monetary 12 months (FY) and the previous 10 FYs. Residential standing wants recent willpower for every year.

An particular person qualifying as resident and ordinarily resident (ROR) is taxable on his/her worldwide earnings in India and is required to report all international belongings within the India earnings tax return (ITR).

Also, the earnings earned from such international belongings in the course of the related 12 months, together with the character of earnings and head of earnings underneath which such earnings has been supplied to tax within the India ITR, must be reported in relation to every international asset.

In your case, if you happen to qualify as ROR of India within the 12 months the items are offered, matured or transferred, the capital features on sale of items of Singapore funding coverage shall be taxable in India. There is an exemption accessible underneath the Indian tax legislation for maturity proceeds of insurance coverage coverage if sure circumstances are fulfilled (instance, insurance coverage coverage is issued on or after 1 April 2012 however earlier than 1 February 2021 and the premium payable on the coverage doesn’t exceed 10% of the capital sum assured).

Such exemption will be explored after analyzing the phrases of the insurance coverage product in your case. If you qualify as NR or RNOR, capital features on sale of items of Singapore won’t be taxable in India until the receipts are immediately acquired in India.

Benefit underneath the Double Taxation Avoidance Agreement (DTAA) between India and Singapore could also be explored relying upon your residential standing in India, residential standing in Singapore and residential standing underneath the DTAA.

Accordingly, it will be significant in your case to find out your residential standing in India, residential standing in Singapore and residential standing underneath the DTAA to research taxability of the capital features earnings earned in Singapore.

I’m a non-resident Indian with an Overseas Citizen of India card. I don’t dwell in India and haven’t any earnings in India. However, I maintain each everlasting account quantity (PAN) and Aadhaar playing cards. Is it obligatory that I hyperlink my PAN card with Aadhaar card?

—Name withheld on request

As per Section 139AA of the Income Tax Act, 1961, each one who has been allotted PAN and who’s eligible to acquire Aadhaar quantity is required to intimate his/her Aadhaar quantity to the earnings tax authorities. Failure to take action will make the PAN inoperative until the date Aadhaar quantity is intimated/linked.

However, as per the notification quantity S.O.(E) 1513 dated 11 May 2017, the federal government has exempted the next lessons of individuals from provisions of Section 139AA:

Individuals residing in Assam, Jammu and Kashmir and Meghalaya; non-residents underneath the earnings tax legislation; senior residents of the age 80 years or extra and international residents.

The major situation for exemption is that the person don’t possess the Aadhaar quantity or Aadhaar enrolment ID.

Sonu Iyer is tax accomplice and other people advisory companies chief, EY India.

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