I am an NRI , and I am earning money overseas would I need to pay tax on this in India?
The NRI status provides a tax exemption on all income which has been earned overseas and received overseas. If the salary is received from an employer who is based in India then that salary is taxable.
Many NRIs who have have been sent overseas by their Indian companies get a salary in India and for the duration they are working overseas on a project they also get a salary overseas. The Indian salary attracts the tax in India whereas the overseas salary gets taxed in the respective country of stay.
What about my income in India, would I pay tax on that.
If you are an NRI then the overseas income earned and received outside India is exempt, however any income earned in India would attract the tax and you need to lodge the tax return. Section 9 (1) (ii) of the Income Tax Act, 1961 specifies that income is chargeable to tax under the head "Salaries" if it is earned in India.
I have some shares in India and I get some dividends, I also have some fixed deposits in India, would I pay tax on them?
If your total income in India is below the tax threshold, then you need not lodge the return , if it more than the tax threshold then also nder Section 115G of the IT Act 1961, an NRI need not file a return if his income consists of 'investment income' or income by way of long-term gains or both and the tax has been deducted from such income.
I bought some share overseas , if I make a capital gains would I pay tax for that in India?
If you are an NRI and you bought some shares overseas, now you are planning to return to India, then if you sell it before you become resident in India, then you would not pay tax on that, however if you got the resident status in India and then sold you shares overseas , you would have to pay tax on that in India.
When I go back to India I would like to buy shares in the stock market, would I pay tax if I make gains?
Yes, as mentioned above any income earned in India would attract the tax.
I am going to bring my saving from overseas to India, would I pay tax on that?
No , as you earned it overseas it will not attract the tax.
I will not repatriate all my overseas saving to India at once, I would like to repatriate my money later on when I get settled in India, would I pay tax if I bring back my savings to India, after have settled back in India.
No , as this money was earned overseas and you would not pay tax on this, whether you bring all your money when you return to India , or bring it later.
I have a foreign passport, when I take my family back to India and my kids grow up , they will have foreign passports, if they work in India would they pay tax on their earnings.
This rule is the same in India as it is in other countries, when you went overseas and you worked overseas you paid your taxed overseas as you were resident in that country.
The same way when your kids work in India and earn money, they would have to pay taxes in India. The same principle would also be applicable to you even if you have a foreign passport.
When I return to India, my existing foreign employer would like to retain me as a consultant, would I pay tax on that income?
Ok when you return to India and start working as a consultant for your existing foreign employer and you get your consultancy income from this company you would have to pay tax as the money would be earned in India.
Once I return to India, I may need to go back overseas and do some project for the overseas company. Would I pay tax on that money?
Once you settle back in India and become resident then you would be liable to pay taxes on any money, as you would be resident in India therefore you would pay tax on that money which you earned during a short visit overseas. Depending upon your work you may get deductions under Section 80RRA.
eg. if you are a technician and you earned $10,000 overseas in that short stay, then you would only pay tax on $2500 or 25% of the total income. However this may not be applicable to you.
Following is the definition of the technician -
According to explanation (c) of section 80RRA of the Income Tax Act, 1961, 'Technician' means a person having specialised knowledge and experience in:
- Constructional or manufacturing operation or mining or the generation or distribution of electricity or any other form of power, or
- Agriculture, animal husbandry or dairy farming, deep sea fishing or ship building, or
- Public administration or industrial or business management, or
- Accountancy, or
- Any field of natural or applied science (including medical science) or social science, or
- Any other field which the board may prescribe in this behalf. The board has prescribed the following fields under Rule 11C (profession of actuaries; banking; insurance; journalism).
I am an NRI and I am returning to India permanently and bringing everything to India would I pay the wealth tax.
According to Section 5(v) of the Wealth Tax Act: Person of Indian Origin or an Indian citizen who is returning to India with the intention of permanently residing in India will need not pay wealth tax for upto 7 successive assessment years on the following heads.:
- money brought by him into India
- value of assets brought by him into India
- money in his NRE account in any bank on the date of his return