FATCA and CRS have similar characteristics on the surface, but underneath there are differences that make universal compliance complex and challenging.
FATCA
Answer: Normal funds transfer shouldn’t be taxable. Ex: Transfer of money in your savings account to India Remember that the name should be an exact match or the funds would be stuck in transit.
If you sold shares in a foreign country and are then transferring that money to India then:The capital gains are taxable in India
Assume you bought a single share at $50 and sold at $60, then the $10 is capital gains and you need to add the $10 to your taxable income and pay tax on it.
Introduced by the Internal Revenue Service (IRS), FATCA prevents US taxpayers who hold financial assets in non-US financial institutions and offshore accounts from avoiding taxation on their income and assets. Foreign financial institutions agree to report on these U.S. account holders or face 30% withholding on all U.S. income.
CRS
A global reporting standard for the automatic exchange of information (AEoI) set forth by the Organization for Economic Cooperation and Development (OECD). More than 96 countries share information on residents’ assets and incomes in conformation with reporting standards. CRS is more wide reaching than FATCA and requires a unified, cross-team effort to ensure readiness and compliance.
A Non-Resident Indian (NRI) is a citizen of India who holds an Indian passport and has temporarily emigrated to another country for six months or more for employment, residence, education or any other purpose.
If I send money from abroad to a normal Indian savings account, will it be taxable?
Answer : Normal funds transfer shouldn’t be taxable. Ex: Transfer of money in your savings account to India Remember that the name should be an exact match or the funds would be stuck in transit.
If you sold shares in a foreign country and are then transferring that money to India then:The capital gains are taxable in India
Assume you bought a single share at $50 and sold at $60, then the $10 is capital gains and you need to add the $10 to your taxable income and pay tax on it.
Yes, as an NRI, you can open both these accounts. But please remember, the purpose for both these accounts are different.
A Non-Resident Indian (NRI) is a citizen of India who holds an Indian passport and has temporarily emigrated to another country for six months or more for employment, residence, education or any other purpose.
If I send money from abroad to a normal Indian savings account, will it be taxable?
Answer : Normal funds transfer shouldn’t be taxable. Ex: Transfer of money in your savings account to India Remember that the name should be an exact match or the funds would be stuck in transit.
If you sold shares in a foreign country and are then transferring that money to India then:The capital gains are taxable in India
Assume you bought a single share at $50 and sold at $60, then the $10 is capital gains and you need to add the $10 to your taxable income and pay tax on it.
NRO account help you to retain your Indian earnings and savings as well as remittance proceeds of sale of assets purchased in rupee or proceeds of insurance policies purchased in rupee etc. In this account, you can also credit your foreign exchange earnings but remember, the funds from this account cannot be repatriated outside India
An NRE account helps you to credit your foreign exchange earnings and current income like dividend, interest etc. is also allowed to be credited to this account on a case to case basis. Interest is tax free and there is no TDS.
Conclusion :
if you are moving out of India for an uncertain period or a long term work assignment, open NRO and NRE account before moving out of India itself. However, if you have existing savings account with a bank, instead of opening NRO, ask the bank to re-designate the account to NRO
An NRI can open an NRE (Non-Resident External) account, which enables you to invest in Indian stocks in the secondary market. An NRI also needs the RBI’s approval under the PIS (Portfolio Investment Scheme), allowing one to invest in the Indian stock market. A sizeable benefit that an NRE account offers is the allowance to repatriate their earnings to their country of residence.
As per RBI mandates, there are certain restrictions on NRI investments in India. Here are some additional details that you will need to be on top of:
Last but not least, the tax liabilities arising out of the stock investments should not be ignored. Although the tax liabilities of an NRI investing in India are the same as those of a resident investor, tax is deducted at source in the case of the former. This leads to the question, ‘Are NRIs subjected to double taxation once in India and again in the country of their residence?’ Well, it depends on the country of residence. If the Indian government has an avoidance of a double taxation treaty with that country, NRI will be saved from double taxation.
Thus, you can see, that the process for NRIs to directly invest in Indian equities is quite straightforward. Being well informed, a few simple steps to follow and you’re ready to reap the benefits in terms of solid returns from the Indian markets!
NRIs are allowed to invest in mutual funds in India on a repatriable or non-repatriable basis subject to regulations prescribed under the Foreign Exchange Management Act (FEMA). For general NRIs (not from USA and Canada) the process of investing in Indian mutual funds is as simple as it is for the Indian investors. They just need to comply by certain norms set by the country they are based in.
If an investor has investments in India and moves to USA or Canada as an NRI, the investments can be stopped by the AMC. “When the investor moves to either USA or Canada, the fund house will stop taking further investments if the particular fund house doesn’t allow investments from USA and Canada. If the fund house accepts such investments, then you just have to update the needed documents,
Only 8 AMC’s Indian mutual fund houses that allow USA/Canada-based NRIs to invest . List of fund houses that accept investments from NRIs based in US and Canada are given below
NRIs are allowed to invest in mutual funds in India on a repatriable or non-repatriable basis subject to regulations prescribed under the Foreign Exchange Management Act (FEMA). For general NRIs (not from USA and Canada) the process of investing in Indian mutual funds is as simple as it is for the Indian investors. They just need to comply by certain norms set by the country they are based in.
If an investor has investments in India and moves to USA or Canada as an NRI, the investments can be stopped by the AMC. “When the investor moves to either USA or Canada, the fund house will stop taking further investments if the particular fund house doesn’t allow investments from USA and Canada. If the fund house accepts such investments, then you just have to update the needed documents,
NRIs are allowed to invest in mutual funds in India on a repatriable or non-repatriable basis subject to regulations prescribed under the Foreign Exchange Management Act (FEMA). For general NRIs (not from USA and Canada) the process of investing in Indian mutual funds is as simple as it is for the Indian investors. They just need to comply by certain norms set by the country they are based in.
If an investor has investments in India and moves to USA or Canada as an NRI, the investments can be stopped by the AMC. “When the investor moves to either USA or Canada, the fund house will stop taking further investments if the particular fund house doesn’t allow investments from USA and Canada. If the fund house accepts such investments, then you just have to update the needed documents.
