Tax rates for NRIs are no different from those for residents

I have been informed that recently, there has been a change regarding the procedure and documents required to be submitted by an NRI for effecting a remittance out of India. What is the exact nature of this change? — Saurabh Gupta

Yes, the remittance procedure has been modified from July 1, 2009. Earlier, for effecting the remittance, the NRI needed to submit a certificate from a chartered accountant (CA) and an undertaking detailing the transaction and the bank account to which the remittance is to be credited. Now too, the same details are required albeit in a modified format.

The CA certificate is to be provided in prescribed Form 15CB. Also, now the undertaking needs to be submitted in Form 15CA. The information to be furnished in Form 15CA is to be filled using the information contained in Form 15CB (certificate). Form 15CA has to be then uploaded on www.tin-nsdl.com. The remitter will then take a print out of this filled up Form 15CA (which will bear an acknowledgement number generated by the system) and sign it.

The duly signed Form 15CA (undertaking) and Form 15CB (certificate), has to be submitted to the bank who will in turn forward a copy the certificate and undertaking to the assessing officer concerned. Once this is done, the funds may be remitted abroad.

Please note that though the procedure seems complicated at first glance, it basically amounts to filling out of two forms, one of which will be done by the chartered accountant concerned. The other one has to be filled online and then printed out with the system generated acknowledgement number. Submission of both these documents is all that is needed to effect the remittance.

I have a small apartment on the outskirts of Mumbai which I have let out for a rent of Rs11,000 per month. I have no other income in India. Would I have to pay any tax on this income in India? Would the tax be payable if I were to gift the rental income to my retired parents who live in India? Would they have to pay tax on this gifted amount? — Nalanda

The tax rates for NRIs are not different from those applicable to resident Indians. Income up to Rs1.6 lakh is not taxable. Since your income from rent would amount to Rs1.32 lakh only, there would be no tax payable on rent in India. Any monetary or non-monetary gifts made to parents are not taxable. There is no limit on the amount that can be gifted as well as the number of times it can be gifted.

The writer is director, Wonderland Consultants a tax
and financial planning firm. He may be contacted at sandeep.shanbhag@gmail.com