Name: Ismail Place: ksa
Subject: custom

Question : 1

Custom rate for foreign passenger

Answer :

We need to know the goods for us to provide the answer

Question : 2

I am an NRI being in U.S. for past 10 years, working fulltime for past 4 years and paying taxes.

I have recently moved to India and have received offer from a company that may pay me in rupees or dollars.  I would be in India 30-40 % of the time and in U.S. rest of the time.

Should I earn in dollars or rupees, assuming equal pay?

I appreciate your help.

Answer:

You would be treated as a resident if your stay in India goes beyond 182 days in a year. Since you have returned to India recently, you would be treated as resident but no ordinarily resident and you would be obligated to pay tax on the Indian income. Since you are an employee and the services are rendered in India, the entire income received, irrespective of the currency in which it is paid, would become taxable. It is another question that since you are repatriating the earnings to India, you may consider claiming deduction u/s 80RRA provided you satisfy the conditions laid therein.

Question : 3

If we pay royalty to the other party and we with hold Tax under Double Taxation Treaty with that country. Is it required for the other Party to fill up some kind of form and send to us to acquire benefits of  withholding tax

Answer:

The proof of tax paid is what you need to submit to the IRS authorities in case you are taxed in USA.

Question : 4

I am in Singapore for more than 8 years. I have got an appointment in Chennai compnay and I would like to move to Chennai. But the company offering job,w ants me to go overseas on deputation.

1. I would like to shift my personal belongings to Chennai - Should I pay customs or any form of tax?

2. What is the best way to transfer my belongings?

3. I would like to leave my family in Chennai.

4. How should I transfer my money ( Around 40 lacs) from Singapore to India.
Can you able to clarify this.

Thanks & Regards
Kumar

Answer:

You can shift your belongings on transfer of residence basis and minimize your duty liability. In case you are a professional, you are entitled to bring used items such as car, etc. You can leave your family in Chennai and go on tour. The money can be transferred to your RFC account and the deposit can be in foreign currency. If you would so like, you can even purchase an immovable property for your family residence. Since there is no change in your residential status, if you can arrange with your employer to pay your salary in foreign currency outside India, the entire income will be exempt. If you get your salary in India, the income earned would be treated as Indian income and you would be entitled to relief in respect of business travel.

Question : 5

Do I need to get the tax clearance if i am selling a property for 7 lakhs in Chrompet? How much will be the percentage?

Answer :

The tax clearance certificate in respect of sale of property has since been dispensed with.

Name: Vinod Bhatia    Place: Lucknow
Subject: HRA

Can I pay HRA to my mother ven if the property for which I am paying HRA is not in her name?

Answer :

You can claim relief in respect of rent paid to your mother as a sub-lessee.

Question : 7

I am an NRI working as a Regional Sales Director for an American company.  They have given me an option to relocate to India. I will be paid in US dollars. Can I get any major tax benefit because of NRI status? Do you advise paying the taxes in US or in India?

Answer :

You would be held taxable in respect of income earned in India if your stay goes beyond 59 days during the year. In case your stay is for more than 182 days, you would be treated as resident under the Act. If you are a professional and you repatriate your earnings to India, you would be entitled to relief u/s 80RRA provided you satisfy the conditions laid therein. Since there is a double taxation avoidance treaty between India and USA, you may be entitled to relief under the treaty for taxed paid on the same sources of income. Regarding your question whether it is advisable to file taxes in India or in USA, there is not much of a benefit involved as the maximum marginal rate of personal taxation is 31.5% in India. However the process of filing the returns and getting refunds is pretty quick in USA.

What is the difference between salary and professional charges? a  consultant doctor employed by a hospital is  paid a  fixed amount per month. is this salary or  professional charges?

Answer :

It depends on the terms of the contract and under the contract, whether there is any employer - employee relationship. Otherwise, you would be treated as a consultant only. Paying fixed amount per month would not make you an employee as even retainers are paid fixed amount per mensum. From the facts shared, we would consider your status as that of a consultant only.

Question : 9

After 5 years of stay in US I returned back to India, however I still maintain my US Dollar account in US, and have earned interest interest on same.  Current financial is my first tax year after returning back to India.

Please advise if I have to pay tax on my USD interest earning.

Thanks for your help.

Answer :

Since you are a resident but not ordinarily resident, you need not pay tax on the interest earned on US accounts. However as per the requirements of FEMA, you are supposed to disclose the fact of your return to the Apex bank and take its permission for you to retain your foreign accounts. In case you have plans of going abroad once again, you may open RFC accounts.

I am working with one IT major in India, for the past one year I am working in United Kingdom on a deputation, we get living allowance and housing allowance in pounds. If I need to transfer some pounds out of the savings I have made. What is going to be the tax&forex legal implication?

Answer :

As per the extant provisions of the Income Tax Act, any allowances paid by the employer becomes taxable and any genuine expenses incurred by you for business purposes would be deductible. Any savings that you have made would be treated by the IT authorities as taxable income. Under the FEMA, no violation is involved as the money has been repatriated to your accounts in India.

Question : 11

Who is an NRI, what are all the criteria to be an NRI? Do I need to file a tax return if I am NRI?

Answer :

A person will be treated as a NRI in case his stay outside India is for more than 184 days. In other words Indian citizens going abroad for the purpose of employment can stay in India for 181 days without becoming resident in that year even if they were in India for more than 365 days during the preceeding four years. In case you continue to earn income in excess of Rs.50000/- in India on account of your properties, investment income, etc, you are obligated to file a return under the Act.

If I stay more than 180 days away from India, do I have to file a IT return? (Still I am getting my Indian salary hence I have the form 16 for the same period I stayed abroad)

Answer :

Since Form 16 has been issued to you, you are advised to file the return as you have become an assessee under the Act.

Question : 13

I am working in US since two and half years., I have sent the money to my elder brother in India by wire tranfer  to buy a house for me but he has cheated me. I have the full details about the money transactions (wire transfer). With all my wire transfer receipts, Is there any  Legal way to get my money back?

Answer :

You can approach any competent lawyer to initiate legal proceedings against your brother for recovery of money.

Question : 14

We propose to recruit a non resident us citizen as a consultant for some film related service.
he is a tax payer in USA.

1)would section 195 apply for payments made to him?
2)can we he claim DTA releif under Indo-Usa DTAA?
3)what are the relevant Article in DTAA we have to refer to?

Answer :

Section 195 would govern only investment income and salary income.  Therefore tax has to be deducted if the US citizen becomes and employee. He is entitled to claim relief in respect of double taxation under the US laws by showing proof of tax paid while filing his returns before IRS authorities. You may see the relevant portion for "fees for technical services' under the treaty.

Question : 15

I was employed in India before I took an offer in State of Qatar on 21st Oct'01. I have following queries:
Do I have to file returns with IT department of India ?
Shall I be exempted from Income Tax for the salary which was earned between 21 Oct'01 - 31 March'02 ? If so how is my tax calculated ? Please advise. Many thanks in advance.

Answer :

Since your stay in India has exceeded 182 days during the year, you would be treated as a resident and you are obligated to offer your global income for Indian taxation. However you can claim relief in respect of taxes suffered in Quatar under the Double Taxation avoidance treaty.

Question : 16

This is a reminder. Following message was sent to you nearly couple of months back and I was advised that reply would be posted in NRI corner in 2 weeks from then. A bit surprised that no response is forthcoming.
Can you please check and advise?

"Date of arrival in India" as well as "date of departure from India" are stamped in the Passport(s) by Immigration officials in Indian airports.
 Based on these entries, how are the number of days stayed in India  calculated to assess NRI status?
 Is the date of departure excluded while computing number of days stayed  in India ?
Similarly clarification is required whether date of arrival is treated as a day of stay in India or not.""

Answer:

The actual number of days of your stay in India would be calculated as per your passport entries and the date of arrival as well as the date of departure would be included for the purpose.

Dear sir,
I had been to Gulf on 06.09.1999 for employment.  From 06.10.2000 to 18.11.2000 i was in India on my   vacation.   Back to Gulf on 19.11.2000 again came back to India on   06.11.2001 and   joined in a Indian company on 19.12.2001.     please let me know the residential status for
different A.Y     From which A.Y. i should file my tax returns.
Regards   E.Somesh

Answer :

From the facts shared, you have been in India as per the following time table:

From   To   No. of days  Assessment year

06-10-2000  18-11-2000  44 days   2001-2002
06-11-2001  31-03-2002  146 days  2002-2003

As you have stayed in India for less than 182 days for both the above assessment years, you will be treated as a Non-resident Indian for both the years. If your Indian income during the above periods is less than Rs.50000/- per annum, there is no obligation on you to file the return.

Question: 18

I am working in London on a work permit and given allowances by my  company in India.  Should I pay tax in the UK?

Answer :

As you are aware, the taxability of the allowances paid by the Indian company under the UK tax system does not arise unless the terms of your employment suggest otherwise.

Question: 19

How much tax we have to pay for the goods more than    Rs1,00,000 to
customs at the airport.goods will be from USA to india

Answer :

We will have to know the nature of goods and the value of each to suggest answers for the problems.

Question:  20

Please let me know under which section rebate of Rs.   5000/- is allowed to female assessee and from which assessment year  onwards. Is it on the income or on tax i.e icome is reduced by 5000/- or tax    is reduced by 5000/-.   Thanking You

Answer :

The rebate is allowable with effect from the assessment year 2001 - 2002 under section 88C of the Income Tax Act. The amount of rebate is the lower of the amount of income tax before giving any rebate under sections 88, 88B, 88C and 89 (1) or Rs.5000/-. The rebate is allowed for resident women before 65 years as at the end of the year.

Question: 21

I am in US on H1 from April 2001. I am planning to   return to India in June 2002. it seems I will be taxed on my global   income for financial    year 2002-2003. I wanted to know what deductions I   will be eligible for   on my global income. And what does double taxation   mean. Any income   taxed once, cannot be taxed OR tax liability will be   calculated in India    on the total income and the total tax liability will   be tax owed in    India minus Tax paid in USA. Please advise.

Answer :

Since you would be in India for more than 182 days during the assessment year 2003-2004 (financial year 2002-2003), you would be a resident under section 6 of the Act and you have to offer your global income for the year under Indian income tax law. However you would be entitled to double taxation relief in respect of taxes suffered in USA for your US income.

Question: 22

As I am a resident in uk...how could i open an account without going abroad? (i.e. india)   how would i go about it?

Answer :

There are many banks offering online banking services. You may, if you wish, log on to www.icicibank.com and follow the procedure.

Question: 23

I was a permanent resident of USA for more than 10 years. I returned to India for good.I am now a resident and citizen of    India. I am receiving US Social security retirement benefits from last Aug.2001.As per DTAA between India and US, this benefit cannot be taxed in India as US Federal taxes are deducted and only the balance amount is only sent to me.
Kindly confirm. Can I get an advance ruling on this?   If so, what is the procedure? Help please Mohan

Answer :

Since it is a question of repatriation of foreign savings for services rendered outside India, the question of taxability of the receipts in India under Indian tax laws does not arise.

Question: 24

Please let me know the current market value per sqft    of land Sundarraj    Nagar in Trichirappalli; This comes under Kottapattu    Taluk.

Thanks
Bala.

Answer :

In case you want to get the latest data you may wish to log onto www.indiaproperties.com or www.propmart.com or any other similar property portals

Question: 25

kindly clarify whether TDS is aplicable to the Post  office monthly   income scheme or not

Answer :

The post office monthly income scheme is outside the purview of TDS obligations under the Act. The interest qualifies for deduction under section 80L. The balance is exempt from wealth tax.

Question: 26

Myself, my brother and my mother together are    planning to take a house   loan (around 10,00000) to construct a house. The land    on which we will
be constructing the house is in the name of all three   of us.
I have the following questions regarding this.

1. Can all three of us get the full tax benifit. i.e    each of us get the    MAX  50,000 tax benifit on the interest component of    the house loan.

2.  Does the tax benift depend upon who is the main    loan applicant and
rest two as co-applicant?

3. If we take the tax benift for some time and after    that re-pay the    whole loan, will I have to return the tax benifit for    the period for    which I have already taken the tax benifit.

Answer :

As per the requirements of section 26 of the IT Act, the shares of the joint owners must be definite and ascertainable. The share of each such person in the income from the property shall be computed in accordance with sections 22 - 25 of the Act. The three of you can claim the full tax benefit on the interest payable on the amount borrowed for constructing the house subject to a maximum of Rs.150,000/- per annum for each co-owner and this deduction is available from the year in which the house is ready for occupation. Since all the three have borrowed the money jointly, the liability to repay rests with all of you and you would be treated under the Income tax law as an owner of the property. Since the interest liability is allowed as a deduction on accrual basis, the interest payable would become NIL on repayment of the loan and you would be allowed deduction for the actual interest paid. There will not be any re-opening of assessments because of loan repayments.

Question: 27

Dear Sir:I had purchased NRI Bonds issued by SBI in 1991.These matured
in 1998 and subsequently were put in Fixed Deposits.
How do you convert them into US Dollars,after the    announcement that Non
Repatriable Deposits can be converted into NRE Account    after April  01,2002?
Thank you for your help.

Answer :

The NRI deposits become repatriable only after September 1, 2002 as per the latest budget and the RBI directives. However these provisions become applicable only to NRNR / NRO accounts and not in our view extend to Rupee fixed deposits.

Question:  28

I am an employee of a Stock broking company. In our    company presently    no LTC is available to the employees. Could you please    guide me as to    how do I include this perquisite in the salary. What     are the advantages    /  disadvantages. the limits, etc.

Answer :

If the LTA is not provided by the employer, the entire salary received would become taxable.

Question: 29

Here I am using a car in my name past two years and I    like to bring    this car to india ie Chennai. Can you explain how much    tax and other    rules and details please.

Answer :

You are entitled to bring second hand car which has been in your use on transfer of residence basis.

Question: 30

Kindly provide the clarification sought below.

"Date of arrival in India" as well as "date of    departure from India"    are stamped in the Passport(s) by Immigration    officials in Indian    airports.

My understanding is that the date of departure ( one   day )is not    treated as the day of stay in India  while computing    number of days stayed    in India to assess NRI status. Is my understanding    correct?

Similarly clarification is required whether date of    arrival is treated    as a day of stay in India for the same purpose.
Thanks

Answer:

The actual number of days of your stay in India would be calculated as per your passport entries and the date of arrival as well as the date of departure would be included for the purpose.