Tips to help an NRI in optimizing tax savings when living or earning abroad
If you are a non -resident India you have the dubious honour of paying the tax a couple of times. Once you are living abroad it is obvious that your income will be taxed in the host country. Still if you have property or investments in India that earns money then you need to pay taxes. Hence NRI tax planning in Pune is suggested on all counts as it enables you to save on the tax front. It makes sense that you make the most of all the tax deductions.
Cash in on the benefits of deductions
Most basic reductions entitled to a resident Indian is not available to a NRI. It is not possible to earn tax deductions by investing in PF scheme or a national saving certificate for example. There is no form of tax deduction for medical treatment or medical expenses. But you do have an access to a national pension system and all the additions related to it.
Applying for a PAN card
PAN stands for a permanent account number which indicates that you are a tax payer in India. By having a PAN card number it would prevent any form of tax fraud in India. Even to claim an income tax refund you need a PAN card.
Any income that is above a specified source is subject to tax deducted at source. If you fail to provide your PAN card account number in India you may have to bear tax deducted at source. A tax consultant for NRI in Pune would suggest you to avail a PAN card to prevent such an occurrence.
Your NRI status is to be maintained
When you are living abroad the income that you make there is not taxable in India. But if there is a doubt about your non-resident status then the income can be taxed in India. The visits to India should be planned in such a way so that you do not lose out your NRI status. The liability of the tax is determined by your residency and income status. If the residential status changes so does the tax liability.
Cash in on the benefits of provisions
Another way so as to maximize tax as a non – resident India is to cash in on the benefits of tax professions that would be issued for long term asset purchased in foreign currency.
When you are selling or transferring any foreign assets, you are bound to make a profit or a loss. Capital gains may be deducted when you are selling or transferring foreign assets. But you are entitled to some form of exemptions under section 115 F of the income tax act.
If you happen to make a profit on the sale of foreign assets you may choose the reinvest the assets into the shares of a foreign company. You could deposit it into an Indian bank or you can contribute it to the National share certificate plan.
