News, Views and Information about NRIs.

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March 8, 2012

NRI returning to India? How to calculate your tax


The grass is not really greener on the other side as many Indians abroad are figuring it out the hard way. Faced with a gloomy economy and career prospects, some are packing their bags and heading back to test the job market.
Though finding a job would be easier in India, especially for those with good degrees and employment background, figuring out the tax liability — especially in the initial years — may be a daunting task. If you are returning to India for employment, there are some tax issues one has to consider before taking the final decision.
This is crucial because the taxability of overseas income (such as rental income from property outside India, capital gains, bank interest, dividends, etc.) for returning Indians largely depends on their residential status in India.  Planning the timing of one’s return is very important.
RESIDENTIAL STATUS
Residency rules play an important role in determining the income that is taxable in India. Indian residency is triggered in either of the following situations:
1. The individual is in India in that financial year for 182 or more days; or
2. The individual is in India in that financial year for 60 or more days and 365 days or more in the four financial years prior to that financial year.
If neither of the above conditions is satisfied, the individual would be treated as a Non-Resident (NR). Satisfying any of the above two conditions would qualify the individual as a resident. Indian tax laws provide a relief for a category of individuals who are ‘Not Ordinarily Resident’ (NOR).
One can become a NOR either if his/her stay in India in the 7 financial years immediately preceding that financial year is less than 729 days or if he/she was a Non-Resident for 9 of the 10 financial years immediately preceding that financial year. A Resident other than a NOR is generally referred to as an Ordinary Resident (‘ROR’).
In case an Indian citizen or a PIO visits India in any tax year, the above mentioned 60 days shall be replaced by 182 days. The proposed Direct Tax Code, however, does not give this preferential benefit to the NRIs or PIO visiting India.
SELLING YOUR PROPERTY ABROAD
As a returning Indian, try to sell your overseas property while you are still a NOR or NR. As a NOR or NR, if you sell any overseas assets and receive the sale proceeds outside India, you do not have to pay any taxes in India. If you need to buy a house in India out of the sale proceeds, you can first receive the sale proceeds in a foreign bank account and thereafter remit part or whole of the proceeds back to India without creating any Indian tax liability.
TAXABILITY AT A GLANCE
i. Income received or deemed to be received or accrues or arises in India during the previous year.
- ROR – Fully Taxable
- NOR/NR – Fully Taxable
ii. Income which accrues or arises outside India and received outside India in the previous year from any other source.
- ROR – Fully Taxable
- NOR/NR – Not Taxable
iii. Income which accrues or arises outside India and received outside India during the preceding previous years and remitted to India during the previous year.
- ROR – Not Taxable
- NOR/NR – Not Taxable

NRI man booked for cyber crime against wife

A matrimonial dispute between a Non-Resident Indian (NRI) from Ahmedabad and his wife, from 
Gurgaon in Haryana, hit cyberspace after the husband allegedly created a website by the name of his wife and posted photos and other evidence on it, alleging that he was tortured by her. Taking objection to this, the woman has registered a cyber-offence with Gurgaon police against her husband under the provisions of the Information Technology (IT) Act.
Based on the complaint, Gurgaon police had issued a look-out notice against the husband who was recently detained for a few hours at Ahmedabad International Airport and was let go with a condition not to leave India.
The NRI is Raj Trivedi from Ahmedabad and his wife is Bhavna Sachdev. They married in August 2009 after connecting on a matrimonial website. Trivedi is an NRI settled at Houston in the United States and he has been into the business of commodities.
According to Trivedi, after a short span of married life, they had started to have disputes which resulted in Bhavna lodging a criminal complaint of dowry, domestic violence and harassment against him, his parents and sister. He also added that a litigation related to the complaint is pending before Punjab & Haryana High Court as the court has sent it for mediation.
In the matrimonial dispute, Bhavna has accused Raj, his parents and his sister of dowry, domestic violence and harassment. Whereas, Raj has alleged that his wife is after his property by defrauding him.
After the dowry complaint registered against him, Raj had created a website by the name of his wife and posted all the 'evidence' in his possession against her on the website. Taking strong objection, Bhavna booked him under IT Act, on February 1.
Bhavna, in her complaint, has stated that the act of Raj has invaded her privacy and accused him of libel and defamation. She further stated that Raj has posted documents on those cases which are still running in court. “During this event he has repeatedly tortured and threatened me that he will try to defame me publicly by putting my picture/information on internet and now he has actually done this...,” she added in the complaint.
Following the complaint, the website has been made unavailable on the internet.
Raj, on his part for creating the website, said, “In the dowry complaint, the police was not treating me fairly, was harassing me and I was fearing for my life. And so, I posted that material on website to let my family members and friends know about the evidence in the case in case something happens to me. Also, I wanted to send out a warning message to people about the dangers of entering into a marriage through internet.”
When contacted by The Indian Express in connection with the case, Bhavna refused to comment saying it is not right for her to speak on a matter that is sub-judice.

Keystone bill faces defeat in U.S. Senate: Harry Reid


Thousands of protesters protest against the Keystone pipeline outside the White House in this November 2011 file photo.
Protests against Keystone pipeline

WASHINGTON — The U.S. Senate could vote as early as Thursday on a plan to take quick action on the Keystone XL crude oil pipeline, a bid that will likely be defeated by Democrats but that gives its Republican supporters an opening to criticize President Barack Obama's energy policies.
Obama put the $7 billion project on hold pending further environmental review. Republicans argue the pipeline, which would ship oil from Canada and northern U.S. states to Texas, would create jobs and improve energy security at a time of surging gasoline prices.
The Republicans' Keystone amendment to a highway funding bill would need 60 votes to pass, meaning at least 13 Democrats would have to vote in favor of the measure for it to advance.
Senate Majority Leader Harry Reid told reporters on Thursday he believes the plan will be defeated.
Some Democratic senators have spoken in support of TransCanada's pipeline in the past. Obama has called some Democratic senators to ensure they would vote against the Republican plan, a White House official said.
Republicans have sought to make Keystone an issue in the November presidential and congressional elections, linking Obama's delay to rising gasoline prices.
"At a moment when millions are out of work, gas prices are sky-rocketing and the Middle East is in turmoil, we've got a president who's up making phone calls trying to block a pipeline here at home. It's unbelievable," said Senate Minority Leader Mitch McConnell.
Obama has supported construction of the southern leg of the pipeline, and his administration will assess a new route around an environmentally sensitive area of Nebraska once it has been identified, White House spokesman Clark Stevens said.
"Once again, Republicans are trying to play politics with a pipeline project whose route has yet to be proposed," Stevens said.
DEMOCRATS PROPOSE TO BLOCK EXPORTS
The Republican amendment is among 30 measures - many of them energy related - to be voted on in coming days as the Senate pushes to renew funding for highways and other infrastructure projects, slated to run out at the end of March.
The pipeline would carry crude from Canadian oil sands to Texas refineries and would also pick up U.S. crude from North Dakota and Montana along the way.
Senators will also vote on a proposal from Democratic Senator Ron Wyden that would block exports of oil from the pipeline, as well as refined products made from the oil.
Senator John Hoeven of North Dakota, who has championed the Republican plan to advance the pipeline, said the Democratic alternative would be too restrictive.
"That amendment will block this project, let there be no confusion," Hoeven said on the Senate floor.
Refiners need to be able to export some fuel products that are not widely used in the United States, otherwise their costs - and gasoline prices - would rise, he said.
Wyden told Reuters his amendment "puts teeth" into claims the pipeline would boost U.S. energy supplies.
"You see all over television, commercials and enormous sums of money spent by the advocates who constantly keep talking about how this is going to strengthen domestic energy security," Wyden said. "This amendment guarantees that."
Wyden's Keystone amendment will give Democratic senators a plan to support to show they are also concerned about rising gasoline prices, said Whitney Stanco, an energy policy analyst with Guggenheim Securities.
"By offering an alternative, Democrats are hoping to prevent either measure from reaching the 60-vote threshold," Stanco said in an email to clients.

Osama bin Laden widows charged with illegal entry

ISLAMABAD - Pakistan has charged Osama bin Laden's three widows with illegal entry, Interior Minister Rehman Malik said Thursday, without saying when it had done so or when a trial would begin.
Pakistan took the Al-Qaeda terror chief's wives - two Saudis and a Yemeni - and around 10 of their children into custody after U.S. Navy SEALs killed him at his house in the Pakistani garrison town of Abbottabad on May 2, 2011.
"The case has been registered only against the adults," Malik told reporters in the capital Islamabad. "They can have a lawyer and they have full liberty to go to court and defend themselves," he added.
Malik said bin Laden's children were being kept in a five-bedroom house "with proper facilities as if they were in their own home" but that they were free to return to their native countries if their mothers agreed.
A commission probing how bin Laden lived undetected for years in Pakistan investigated his widows and daughters and took statements from them last year.
Pakistan had not previously indicated any restrictions on the women leaving the country. The investigating committee said late last year that it had no further need to speak to them, giving the green light to their repatriation.
When they were detained 10 months ago, the government said they would be handed over to their countries of origin "as per policy."
The interior minister did not specify what punishment the widows could be liable to receive.
Chaudhry Zulfiqar Ali, a lawyer working with the Federal Investigation Agency that registered the case, told AFP that the maximum sentence was 10 years in jail and a fine of up to 10,000 rupees ($110).
According to an interview with bin Laden's Yemeni brother-in-law published in British newspaper The Sunday Times, the Al-Qaeda leader urged his younger children to go and live peacefully in the West and get a university education.
Zakaria al-Sadah, told the newspaper that in November he had seen his sister, bin Laden's fifth wife, Amal, for the first time since she was shot in the knee during the raid, and was allowed to have several meetings with her.
He said the three wives and nine children who were in the compound - some are bin Laden's children and others are his grandchildren - have been held for months in a three-room flat in Islamabad.
They are guarded by Pakistan's Inter-Services Intelligence (ISI) spy agency, he said.
Alongside the article last month, The Sunday Times published what it said was the first photograph to show some of the young children from the compound: two sons and a daughter, and two grandsons and a granddaughter.
The children were still traumatized after seeing the raid in which bin Laden died, al-Sadah said.

Air Canada to lock out pilots


On Thursday, after negotiations to reach a new collective agreement fell short, Air Canada announced it had served 72 hours notice to the pilots union that a lockout could begin as early as 12:01 a.m. ET on Monday.
Air Canada has served notice that it intends to lock out its 3,000 pilots Monday, the same day another union, which represents thousands of ground crew and mechanics at the airline, is set to strike.
All eyes are now expected to turn to the federal government, which has in the past expressed serious concerns about flight disruptions at the country's biggest airline.
On Thursday, after negotiations to reach a new collective agreement fell short, Air Canada announced it had served 72 hours notice to the pilots union that a lockout could begin as early as 12:01 a.m. ET on Monday.
A deadline passed Thursday at noon for the what the airline had called its "best, last and final offer" — without a deal being reached.
The airline made its most recent offer Wednesday, which was less than a month after Labour Minister Lisa Raitt offered both sides a new mediator and a six-month process to help them settle contract negotiations — a gesture that was welcomed by the airline and union at the time.
"We need to bring closure to the ongoing climate of labour uncertainty at Air Canada which is affecting our customers, destabilizing the company and our operations, and damaging the Air Canada brand," Duncan Dee, the airline's executive vice-president and chief operating officer, said in a statement Thursday.
The pilots expressed frustration with their employer latest offer.
"The corporation pulled a dramatic u-turn (Wednesday) on the first day of our return to bargaining," Capt. Paul Strachan, president of the Air Canada Pilots Association, said in a statement.
"After committing to a federal mediation process that was to last up to 180 days, the corporation instead chose to table what it termed its 'final' offer only 23 days into the process, without any serious effort to bridge our differences by negotiating in good faith."
The lockout Monday would coincide with a strike by thousands of ground crew and mechanics at Air Canada.
Talks broke off late Tuesday between the airline and the International Association of Machinists and Aerospace Workers, which represents 8,600 Air Canada ground crew and mechanics.
The union had rejected a new labour agreement two weeks ago, but returned to the bargaining table this week. According to the union, talks broke after the airline balked at a list of demands from the union.
Raitt said Wednesday she was concerned about the prospect of strike action at Air Canada over the March Break.
The federal government was once again being urged not to intervene in Air Canada's labour negotiations by critics who contend it does little to mend the airline's frayed relations with employees.

Music director Ravi is no more

Mumbai, March 7 - Veteran music director Ravi Shankar Sharma, popularly known as Ravi who gave several hit songs like Chaudhvin Ka Chand Ho" and "Dil Ke Aarman Aansu Bankey Rah Gaye", died here tonight following prolonged illness, family sources said. 86-year-old Ravi, who has composed music for over 70 Hindi and 14 Malayalam films, breathed his last at Bombay Hospital. Sharma?s wife Kanti died long ago and he is survived by son Ajay who is married to Varsha Usgaonkar, a Marathi and Hindi film actress. "He (Ravi) is no more with us. He was keeping ill for a week and was admitted to Bombay Hospital where he passed away today", one of his nephews told PTI. Among the music composer's popular numbers are ?Chaudhvin Ka Chand Ho?, ?Tora Man Darpan Kahlaye?, 'Baar Baar Dekho Hazaar Baar Dekho' in Shammi Kapoor-starrer "China Town" (1962), 'Dil Ke Aarman Aansu Bankey Rah Gaye' from "Nikaa" (1982) and 'Milti Hai Zindagi Mey Mohabbat Kabhi Kabhi" from the 1968 movie "Aankhen" starring Dharmendra and Mala Sinha. Ravi began his career in 1955 by composing the music for "Albeli" and went to do the same for movies like "Dilli Ka Thug" (1958), "Humraaz" (1967), "Neelkamal" (1968), "Ek Phool Do Maali" (1969) and "Mehendi" (1984). "Just heard about the demise of composer Ravi saab. He was one of my most favourites. Never got a chance to meet him. Now I won't ever. R.I.P", national award-winning playback singer Shreya Ghoshal wrote on twitter.