After a successful stint in the foreign shores you may feel that now is the right time to proceed back to your motherland. Though it takes a lot of planning along with preparation for a NRI to return back to India. More so when they are planning to return for good. An important point to consider before you return back is taxation. Since you are planning to stay in India it is vital that you are aware about the tax laws of the country. A NRI tax planning in Pune consultant will guide you about the process in details. Though there are still a few important ones as follows
Be aware about the taxation bodies
First and foremost you need to familiarize yourself with the taxation bodies in India for NRIs. This is the Income tax act referred to as ITA and Foreign exchange management act known as FEMA. FEMA would be tapping on the areas where you can invest whereas the ITA is going to levy regulations on how the investment is expected to be taxed.
Be aware of your residential status
For taxation purposes you need to be aware about the residential status of the current fiscal year. Under FEMA residency would be based on intent whereas ITA indicates the number of days present. Based on the above parameters you will be classified as a resident or a non- resident. Numerous tools are available online that can help you determine your residential status.
Take stock of your tax liabilities
By being aware of your residential status you can be aware of your tax implications. If you qualify as a resident the income would be taxable in India. But if you are a RNOR the income that is earned in India is going to be taxed and not the overseas income.
Post your return to India you can hold the RNOR for 3 years. Once you have attained a residential status income and foreign investments will be taxed in India. But if the global income is already taxed abroad then you can claim deductions according to double taxation module. A tax consultant for NRI in Pune will be able to guide you further on this aspect.
Updating your assets and bank accounts
The moment you are in India you need to decide whether to continue with your overseas account or close them completely. At present a NRI is only allowed to maintain a NRE account and a FCRN account. If you are planning to relocate to India, then the NRO could be re- designated as a resident account.On the off chance that you are wanting to move to India, the NRO could be re-assigned as an occupant account.
For assets held in India a different policy is to be followed. You have to update the mutual funds accounts in India along with the NRI investments that you are holding.
Taxation requires careful amount of planning. You may learn from the close experiences of your friends or relatives who are already in India it is always better that you seek out professional help.