If a resident turns NRI, what would be income tax implication on existing investments?

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If a resident turns NRI for tax functions, what can be the tax implication on current investments? How lengthy can an NRI maintain such investments? What are the tax implications if NRIs promote such investments? If NRI continues to carry shares, what can be the taxability of dividends?


Amit Maheshwari, Associate, AKM International replies, “If the NRI continues to carry investments in Indian shares and mutual funds (belongings), there wouldn’t be any further tax implications or reporting necessities. The belongings in India are required to be disclosed underneath the AL Schedule, if the whole earnings exceeds Rs 50 lakh. The NRI can maintain investments in India so long as he/she needs to. On sale of such shares or mutual funds, the NRI shall be liable to pay capital features tax on switch of such belongings. Dividends obtained can be taxable on the fee of 20% (plus relevant surcharge and cess).”

I work for a pharma main. Just lately, I’ve obtained a job provide as marketing consultant with an EU-based agency. I will probably be sourcing potential shoppers to supply their providers. Since they don’t have any department in India, do I have to register an organization by myself to obtain overseas funds? How can I adjust to Indian tax laws? What do I would like to remember for being an abroad marketing consultant?

Amit Maheshwari, Associate, AKM International replies, “We perceive that you just need to be a part of as a marketing consultant for an abroad firm. There is no such thing as a want so that you can incorporate an organization or another entity in India and you’ll take the consulting price in your account solely. Therefore, it’s completely as much as your discretion how you propose to do it. Nevertheless, you might should be conscious of sure issues. You’ll need to guage in case your providers do qualify as export of providers or not underneath the provisions of Items and Providers Tax. Ordinarily, consulting to overseas firms will not be topic to GST however whether it is, you might have to cost GST in your providers. In any case, you have to to hunt a GST registration as in case of exports, the restrict of Rs 20 lakh for registration doesn’t apply. Additionally, to make sure that providers qualify as export, you have to to make sure that the funds are obtained in convertible overseas trade. Additional, your earnings could possibly be topic to TDS within the supply nation and to take credit score in India for a similar, you might have to avail sure paperwork as proof of tax fee from the payer. Additionally, you will have to file Type 67 earlier than submitting your earnings tax return, if any credit score for overseas taxes is availed. Additionally, for the reason that precise nature of providers will not be recognized, you might also have to verify whether or not because of the providers offered by you, the abroad firm will get uncovered to any Everlasting Institution danger in India i.e., when on account of presence in India in any type, a few of the earnings of abroad firm will be topic to tax in India. This could possibly be pertinent as you might be thought-about as an Licensed Consultant of the abroad firm underneath the tax legal guidelines in India.”