BUSINESS
The sale would attract long-term capital gains tax. The same may be saved either by reinvesting the capital gains into specific bonds or into another property.
Our family has inherited some property from India. My mom is of Indian origin. Can you please let me know if we’re allowed to bring the money to Canada and is there any tax implication and if so how much? Can you please let me know the rules and regulations. — Mitra Sen
The sale proceeds from inherited property may be remitted abroad from India up to a limit of the equivalent of $1 million per financial year (April-March). The sale would attract long-term capital gains tax. The same may be saved either by reinvesting the capital gains into specific bonds or into another property. The tax on the long-term gains is payable @20% after reducing indexed cost. So, after either paying the tax or providing to save the same, the net sale proceeds may be remitted abroad. This can be done by providing the bank with a Chartered Accountant’s certificate in the prescribed form —- 15CB. Simultaneously, an undertaking in the prescribed Form 15CA has to be uploaded on the tax department website. A system generated acknowledgement of having uploaded Form 15CA along with the aforementioned form 15CB has to be submitted to the bank, after which the bank would remit the amount to an account of your choice.
I am a foreign citizen. I had a joint bank account with an Indian resident in India before I became a foreign citizen. The funds in the account were generated in India and not overseas. My queries are:
1. Do I need to inform the banks about my new status, as the account was opened before I became NRI?
2. How much TDS will they deduct from my account? I heard it’s 33.33% but I’m not sure. Is this the same for everyone or based on whether a person is an NRI or a resident. If it’s not the same, then what is the TDS rate for Indian residents?
3. If I am an NRI and have a PAN card, can I claim back tax if my income is below the threshold?
4. If I don’t have a PAN card, can I still lodge an income-tax return? — Karan
We assume that yours is the first name in the joint bank account. If not, the account has to be closed since NRIs (including PIOs) cannot be the second holder in any bank account in India held jointly with a resident. Now, coming to your queries:
1. Yes, you need to inform the banks about the change in your status. The bank will subsequently redesignate the account as NRO (non-resident ordinary). As an NRI, you cannot continue a resident account, getting it changed to NRO is mandatory. Else you may close the account.
2. The TDS rate would be 30.9%. It was 33.99% till last year. After the 10% surcharge on basic income tax has been discontinued, the rate has fallen from 33.99% to 30.9%. For an Indian resident, the rate is lower at 10.3%.
3. Yes, you can file your income tax return and claim a refund of the taxes withheld.
4. A PAN is mandatory for filing income tax return. The return will not be accepted without the PAN mentioned therein.
The writer is director, Wonderland Consultants, a tax and financial planning firm, and can be reached at sandeep.shanbhag@gmail.com
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