NRIs shouldn’t continue resident savings account

I migrated to the US on July 3, 2009 and got a Green Card. I visited India between February 9, 2010 and April 30, 2010. I presume I shall be considered an NRI for FY 09-10. What about the next year? How many days can I come to India for if I wish to maintain my NRI status? I have pension and other income in India and I have savings accounts in India. Is it all right to keep these accounts? For how long can I keep these? Do I have to close these accounts and then start new NRO/NRE account? Can I have more than one NRO account?
— Charanjit Chhatwal
Yes, you will be an NRI for FY 2009-10. And if you are in India for less than 182 days in FY 10-11, you will be NRI for that year too and so on. An NRI should not continue his or her erstwhile resident savings bank accounts. These accounts have to either closed or re-designated as NRO. You can continue to receive pension or any other income in such re-designated accounts.

Let the banks concerned know about your change of status and they would advise you regarding the procedure to get the accounts re-designated. You may also start a fresh NRO or NRE account. And lastly, you may open as many NRE or NRO accounts as you desire with any bank that offers this facility, there is no restriction on this.

My mother, who is an Indian national and lived in India all her life, has purchased two farmland properties in her name in a community project. The properties will be left to me in her Will. According to the community regulations, the land can be used to build a house and maintain a garden to grow fruits and vegetables or to cultivate the land as farmland.

I am an American citizen for the past 33 years. I understand as a foreign national I cannot purchase and own farmland property with my own funds from the US.
My mother is still living and the status quo of the property will remain as is, as long as she is living. However, after she expires, and I inherit the property, can I sell it and repatriate the funds to the US? Will I be liable to pay income taxes in India?    — Ann Alva
Whether one is a foreign national or non-resident Indian (NRI), one isn’t allowed to acquire agricultural land in India.

However, there is no bar on inheriting the same. India doesn’t impose any inheritance tax, so the inheritance per se, will be of a tax-free nature. You may either continue to hold the land or if you so desire, sell it and remit the sale proceeds (net of tax) to the US. There is a limit of the equivalent of USD 1 million per financial year (Apr-Mar) on the amount that may be remitted. Therefore, if the proceeds from sale is more, then the remittance will have to be staggered. You will also be liable to pay long-term capital gains tax on this sale.

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