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Financial Smartness Planning

हुशारीचा अर्थव्यवहार

ई-मेल : coordinator@indiaasha.org
संकेतस्थल : www.indiaasha.org

Financial Smartness Planning

Question (from Virginia, USA): My father, who is a green card holder stays here in the US and India equally. As such, we need help to figure out how best to address tax related issues when it comes to filing taxes appropriately and also dealing with FATCA related issues that have come up recently.
Answer : Points on Indian, USA taxation to be taken care of by Senior Citizens with Indian passport spending 6 months in USA periodically. If stay in USA is over 180 days then that person is treated as Resident Alien and subject to taxes as per IRS Rule, on worldwide income. Reporting of worldwide income in USA before April 15 of following year. Last month, we covered USA side. Let’s visit the India side now:
In India (as of Dec. 20, 2016; budget expected on 31.1.2017):
1. Income tax current threshold Rs. 3 Lacs for senior citizen, with first bracket of 10% plus Education Cess plus
2. Shares: transactions bear security transaction tax 1.25%. Capital Gain long term on Sale of Shares i.e. after 12 months, tax exempt and on short term capital gain 15%
3. Mutual funds interest and Fixed Deposits interest earned are taxed at source (typically 10.5%).
4. Salary or Consultancy Income Tax Deducted at Source detailed certificates.
5. Dividends are tax free.
6. Lease Rent: tax to be deducted at source by lessee 10.5%
7. Property Sale: capital gain tax 15% after indexation. Scope to get exemption if capital gain invested in REC, NABARD etc. Bonds for 7 years @ 6 per cent tax free interest. Minimum 3 years holding mandatory.
8. Separately provide NRO, NRE, Domestic account data.
9. Insurance claims settled: Life …….%…Property ……%10. If NRI heirs earn in USA and have second name in any of the parents’ assets in India, they pay tax on that income in USA.
10. Provident Fund encashment
11. Pension Fund encashment
12. Externalizing Indian Funds up to US$ 250,000 annually by providing data on all taxes paid and obtaining from Chartered Accountant Certificate for that to give the Bank.

Information given here is to give general dataand is not exhaustive treatment of the subject.We are not by means of this material rendering any professional advice or services and the information is not intended to be substitute for specific professional advice. Briefly back office work is done in India at competitive cost and USA professionals file the actual returns in USA.

You can send your questions to us via email at coordinator@indiaasha.org or through our website “Contact us” link at website www.indiaasha.org

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