Going abroad is an exciting challenge and a great opportunity to escape your comfort zones. You will have the opportunity to pick up new skills you may not have had the chance to whilst studying at home, including navigating a new country , communicating in a different language and budgeting with an unfamiliar currency . These are skills which will help you in the future as well as to enhance your CV.
Whether you are going to Europe, Asia, USA or anywhere else in the world for your studies , another benefit of going overseas is being able to learn about the history of the location while being there. Even if you don’t realise it , travelling always changes the way you think and makes you more adaptable and flexible. In that sense studying abroad forces you to leave your comfort zone and learn to start a new life on your own in a place far from your safety zone.
Working abroad is not only a great experience, but it can also launch your international career and open doors to new opportunities around the world. Sometimes going abroad takes that pressure off and gives you the freedom to live by your own rules.
Today, Indians are spread everywhere in the world. Indians started moving outwards in search of opportunities. Now more than 45 lakh Indians live in America alone. This is the largest number of Indians in any country outside India. And their population is increasing in other countries of the world as well.
But my subject will be mainly on Taxation in India for persons living abroad who are in legal language termed as Non Residents under the Indian Income Tax Act 1961 and incidence of tax on such persons while having income in Home town as well as abroad. Some persons move as students and some persons in the middle age group .The assets are built up in India by virtue of:
- Movable Assets in the shape of bank deposits either savings , Fixed deposit in banks and Post offices owned and possessed when going abroad from where recurring income is being received/ accrued in each financial year.
- b) Movable assets in the shape of Shares in different Companies reflected in Demat account as per Stock Exchange Rules and Regulations.
- Immovable assets comprising of property either vacant or rented out .
- Agricultural land either self acquired or ancestral property from fore fathers.
- Assets inherited from father or mother after death which comes to the share as per Hindu Succession Act.
- Any amount remitted from abroad in any bank account/ accounts in India.
- Any other investment/ investments in India either on sale of any assets or transfer of any immovable property.
There has been number of amendments in Income Tax Act in India which a non-resident is not aware of and even a slightest lapse can make a person liable to great harassment mentally as well as financially. The days of residence by a non-resident in India is the main criteria to conclude whether a person is a) RESIDENT b) NON RESIDENT c) RESIDENT BUT NOT ORDINARILY RESIDENT and the implication of taxes in all the cases are different and sometimes one has to declare World Income resulting into deep and cumbersome responsibility on a person. If a person is aware of the exact legal provisions of the act he can manage his stay and affairs in such a manner so that his status never becomes a resident.
In my next talk I will discuss about the incidence of tax on a person depending mainly on the basis of stay in India and conditions where a person is a Deemed Resident depending upon his income in India.
Thanks
Vijay Bansal
