NRI Worldwide > NRIssues
NRIs frustrated with redtape when surrendering Indian passports
Report dated 10/08/2011 @ 6:24 PM
Scores of frustrated NRIs complain about the mindboggling paperwork and inconveniences they now have to face when surrendering their Indian passports to acquire US citizenship and the runaround they experience when they need to revisit their home country.
Rules about the surrender of Indian passports by US citizens introduced by India's Ministry of External Affairs in May 2010 were relaxed in June 2011 and the fee was reduced to $20 from $175.
NRIs say many of the consulates in the US still have no knowledge of the changes and consulates in other countries are unsure if the new ruling applies to British and other NRIs.
Several NRIs from various countries speak of having made personal representations to the ministry of external affairs that were futile and received no response.
The NRI guide to filing Indian tax returns
Report dated 28/07/2011 @ 2:10 AM
July 31st – the last date for filing your Indian income tax returns for the financial year 2010-2011. If you are a Non Resident Indian (NRI) and are looking at the best way to file your tax returns, here is a quick guide on various options, including e-filing. This guide will also help you understand if you need to file a return in the first place.
Who should file returns?
If you are an NRI, you would have to file your income tax returns for 2010-2011 if you fulfill either of these conditions:
- Your taxable income in India during the year 2010-2011 was above the basic exemption limit of Rs. 1.6 lakh OR
- You have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit.
(Note: The enhanced exemption limit for senior citizens and women is applicable only to residents and not to non-residents).
Are there any exceptions?
Yes, there are two exceptions:
- If your taxable income consisted only of investment income (interest) and/or capital gains income and if tax has been deducted at source from such income, you do not have to file your tax returns.
- If you earned long term capital gains from the sale of equity shares or equity mutual funds, you do not have to pay any tax and therefore you do not have to include that in your tax return
(You may also file a tax return if you have to claim a refund. This may happen where the tax deducted at source is more than the actual tax liability. Suppose your taxable income for the year was below Rs 1.6 lakh but the bank deducted tax at source on your interest amount, you can claim a refund by filing your tax return. Another instance is when you have a capital loss that can be set-off against capital gains. Tax may have been deducted at source on the capital gains, but you can set-off (or carry forward) capital loss against the gain and lower your actual tax liability. In such cases, you would need to file a tax return).
By when to file returns?
The last date to file returns for the financial year 2010-2011 is July 31st 2011. However, remember:
- If you do not have any tax payable (that is all your tax has been deducted at source), you can still file your tax return by 31st March 2012 without any penalties.
- If you do have tax payable, you can still file your returns by 31st March 2012 but you will be charged an interest of 1% per month for every month of delay starting from 31st July 2011 till the time you file your tax returns.
- If you do not file your tax returns even by the 31st of March 2010, you may be charged a penalty of Rs 5,000 for every year of delay.
What's the best way to file returns?
Traditionally, you could file your return either by giving a power of attorney to someone in India or by sending your form and documents to a tax expert in India who would then file returns on your behalf.
The easiest option for NRIs to file their Indian tax returns is by using the online platform. There are several options to file online.
Option 1: Income tax website
The income tax website allows you to efile your return. But the process maybe a bit cumbersome. You would need to download a software, fill in your details and upload an XML file. You would then need to print and send a copy of the acknowledgement (known as ITR-V) to the tax office in Bangalore within 30 days.
You can do this for free.
Option 2: End-to-end online
Some online service providers offer a more user friendly experience, for a fee.
Taxsmile.com for instance has preferred partners in various countries including US, UK and Australia. According to Athreya Inc. taxsmile.com's preferred partner for North America, "For a fee of USD 69, an individual tax payer will be able to file his tax return completely online. This fee includes a digital signature of 1 year validity. You would need to send a notarized copy of your address proof and photo ID to Athreya's office and we will create your account within 3 days. "
In addition to Income tax return preparation, the package also allows you to resolve up to 10 tax related queries as well as get the prepared return reviewed by taxsmile's tax professionals.
Athreya also offers a package without the digital signature in which case you would need to sign the ITR-V and courier it to the income tax office in Bangalore. This package however does not come with any support from tax professionals.
Another website elagaan.com also offers a similar service for NRIs. "Elagaan.com offers an end to end solution with digital signature being optional. If you choose not to take the digital signature, you would need to send a signed copy of the ITR-V to our office and elagaan would send it to the income tax office in Bangalore. Here we suggest our users to send 3-4 copies of their signed ITR-V, so that if a copy gets missed/lost in the process, elagaan sends another copy without any additional charges."
Elagaan.com offers services across 38 countries but has physical offices in the US and India only. It charges Rs. 749 for filing your returns without a digital signature. If you want to opt for the digital signature, it comes with a price tag of Rs. 899 for a year's validity.
Option 3: Combination of online and offline
Several websites offer a mix of online and offline service and each works differently.
Taxyogi.com has such an offering that NRIs could use. After entering your income details, the website generates an XML format of your return. You would then have to upload the XML form into the Income Tax website and complete the process there. You would need to print the ITR-V, sign it and send it to the Income Tax Department in Bangalore. This is a free version.
Taxspanner.com also offers a 'Foreign Income solution' package. Priced at Rs.1999, the return is prepared on the basis of information and documents provided by the user. This package includes consultation to a limited extent.
In case of websites like taxmunshi.com, you would have to scan and email your documents to them. They would file the return on your behalf. Once the return is filed, the ITR-V will be emailed to you. You would need to print a copy, sign it and send it to the office of taxmunshi.com and they will send it to the income tax office in Bangalore. The website charges US based NRIs around Rs.799 for a simple income tax return.
In all these cases, the user is required to specify the preferred mode of Refund ie ECS or cheque. In case of ECS, the user needs to provide the MICR code of Bank Branch where the account is held.
Whatever option you choose, you must have a Permanent Account Number (PAN) in order to file your returns.
Courtesy : TNN
Punjab directs officials to settle NRI property cases asap
Report dated 23/07/2011 @ 5:10 PM
In a bid to protect the interests of NRIs, the Punjab government's NRI affairs minister Balbir Singh Bath directed officials to dispose of property cases pending with the Fast Track Revenue Courts asap.
The Minister said camps are being organised in the six most affected districts where NRI grievances will be redressed on the spot. The East Punjab Rent act has also been amended to protect NRI properties.
Staying abroad on Visitor's Visa does not qualify for NRI status
Report dated 10/07/2011 @ 1:50 AM
Vrushali Shah twice went to the US on a visitor's visa. When she returned she was given admission under the NRI quota in a faculty of medicine, on claims she was an NRI. The claim was made on the basis of a certificate issued by a certain prestigious immigration and tax consultant, who declared she was out of the country for a total of 186 days during 2010-11 and therefore eligible for admission in the NRI category.
The NHL Municipal Medical College, Ahmedabad granted her admission for the present academic year.
College authorities later realised the discrepancy and informed Shah she was ineligible and therefore inadmissable under the NRI quota merely on the grounds she had visited foreign countries.
When her admission was withdrawn Vrushali approached the Gujarat high court where her lawyer presented her case of being out of India for 186 days.
The courts upheld the college's decision and ruled that the case was almost an eyeopener and a caveat for other colleges when it comes to giving admissions to students under the NRI quota.
Rules for surrender of Indian passport relaxed
Report dated 04/07/2011 @ 1:55 AM
To the great relief of NRIs, the Ministry of External Affairs, has agreed to eliminate the surrender certificate for those who became naturalised citizens over ten years ago and an OCI application need no longer be accompanied by an original US passport.
The move was welcomed by the Global Organisation of People of Indian Origin (GOPIO) who voiced strong objections when the rules were introduced in 2010. Again in January 2011 the GOPIO held a conference strongly debating the subject.
The GOPIO has now expressed its appreciation with the rule change and lauded the government of India and the Ministry of External Affairs.