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Are OCIs will be treated as residents if stay is>182 days?
- Thread starter newport60
- Start date
----------------------I beleive,since normal NRI who stays in India more than 182 days may be treated as residents ,
similarily OCIs are also treated?
------ For tax purpose only. OCI is NOT NRI, OCI is PIO(A foreign national who has Indian origins or Indian ancestors} .
NRI have Indian passports(A citizen of India, holding an Indian passport, but residing abroad).
If it is--then can we open bank accounts as Residents and need to file taxes as resdients there?
-----------------you have to file India tax if Earn in India and US tax. you can open NRO, NRE accounts. you can check RBI site
Is it possible/plausible?
-------????
Thanks.
Not sure but 'out look Money' previous publication(June 2008) mention some kind of possibilty of opening resident account for PIOs/OCIs who took up employment.(Can this be extended to OCIs who live in india for longer periods):
htt://74.125.155.132/search?q=cache:sBMDbAgfyO4J:money.outlookindia.com/article.aspx%3F90745+OCI+resident+bank+account+RBI&cd=12&hl=en&ct=clnk&gl=us.
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'Bank accounts. You can open and maintain a resident rupee account in India. If your family lives abroad, you are free to remit money (not exceeding net salary, after deduction of taxes, contribution to provident fund and other deductions) there, except for Pakistan, for their living expenses.'
htt://74.125.155.132/search?q=cache:sBMDbAgfyO4J:money.outlookindia.com/article.aspx%3F90745+OCI+resident+bank+account+RBI&cd=12&hl=en&ct=clnk&gl=us.
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'Bank accounts. You can open and maintain a resident rupee account in India. If your family lives abroad, you are free to remit money (not exceeding net salary, after deduction of taxes, contribution to provident fund and other deductions) there, except for Pakistan, for their living expenses.'
http://forums.immigration.com/showt...eas-Citizenship-of-India-and-Useful-NRI-Forms
Bank Accounts and investments in India
NRIs,and PIOs (as per RBI definition - may include PIO/OCI card holders) can hold one of three types of bank accounts:
http://www.rbi.org.in/scripts/FAQView.aspx?Id=34
NRE: (Non Resident, External) Deposit overseas only, Withdraw in India or abroad, deposit held in Rupees. Good for those who earn overseas and want to transact in India like a local. The interest is low/moderate, and generally no taxes are payable in India.
NRO: (Non Resident, Ordinary) Deposit overseas or in India, Withdraw in India only, deposit held in Rupees. Good for those with Indian income, or Indian cash assets. If you want to withdraw this overseas, it is complex. Tax is deducted at source on interest income at around 30%. If this is your only source of income, because tax is deducted at source, you do not need to file a return.
FCNR (Foreign Currency, Non Resident) Desposit overseas only, Withdraw in India or overseas, deposit held in Foreign Currency. Similar to NRE. Lower interest rate, and less currency risk. No taxes in India are payable generally.
In terms of investments, most government instruments and schemes tend to be "Repatriable". Other schemes and investments (especially shares) tend to be "Non Repatriable", but you should check with the RBI http://www.rbi.org.in/scripts/FAQView.aspx?Id=52 or get expert advice.
NRIs and PIOs may be restricted to various extents from investing in companies that deal with real estate, agricultural, plantation activity or civil aviation in India. If you wish to invest in such businesses (and even otherwise), you should seek expert advice.
-----------
Tax for Non Residents
Becomming an OCI will of itself have no bearing whatsoever on your tax status.
This is a very complex area and it is best to get professional advice.
This is to provide rough pointers. For more detailed information - here is an official Income Tax Government Guide:http://www.taxmann.com/TaxmannDit/IntTax/nrcont.aspx
For tax purposes in India, you are considered a resident if you spent 182 days in a financial year 1 April to 31 March in India. You are also considered a resident if you spent 60 days out of the last financial year, and 365 days out of the last 4 years. Otherwise you are a non resident (NR).
There is a third status "Resident but not ordinarily resident (RNOR)", if you are resident as per above rules, but over the last 10 years, 9 of those years you were non resident, or if in the last 7 years, you spent less than 730 days in India. An RNOR is basically a NR who has just settled in India, and is treated similar to an NR for tax purposes.
So your status for tax purposes (Resident/NR/RNOR) is independent of NRI/OCI/PIO/Foreigner.
You basically do not need to file tax returns if you are non resident, and your income is entirely from investment income, long term capital gains, or tax was deducted at source (e.g. NRO account). Again please check.
If you have other income, the income tax is reduced and simplified for non residents. You may need to file a return - and the assistance of an tax accountant is recommended.
A PAN (Income Tax Permanent Account Number - Similar to social security number) is a must if you will be filing a tax return as a resident. Apparently you are exempt from a PAN if you are non resident (NR), and supply a copy of your passport with your return. It is hard to get a PAN as a non resident, though a resident tax accountant may be able to assist.
You need to consider foreign income for you local taxes in your country. Many countries have tax treaties with India (including the US) so keep these in mind when filing tax returns. General policy for most countries is that income is not taxed twice.
Bank Accounts and investments in India
NRIs,and PIOs (as per RBI definition - may include PIO/OCI card holders) can hold one of three types of bank accounts:
http://www.rbi.org.in/scripts/FAQView.aspx?Id=34
NRE: (Non Resident, External) Deposit overseas only, Withdraw in India or abroad, deposit held in Rupees. Good for those who earn overseas and want to transact in India like a local. The interest is low/moderate, and generally no taxes are payable in India.
NRO: (Non Resident, Ordinary) Deposit overseas or in India, Withdraw in India only, deposit held in Rupees. Good for those with Indian income, or Indian cash assets. If you want to withdraw this overseas, it is complex. Tax is deducted at source on interest income at around 30%. If this is your only source of income, because tax is deducted at source, you do not need to file a return.
FCNR (Foreign Currency, Non Resident) Desposit overseas only, Withdraw in India or overseas, deposit held in Foreign Currency. Similar to NRE. Lower interest rate, and less currency risk. No taxes in India are payable generally.
In terms of investments, most government instruments and schemes tend to be "Repatriable". Other schemes and investments (especially shares) tend to be "Non Repatriable", but you should check with the RBI http://www.rbi.org.in/scripts/FAQView.aspx?Id=52 or get expert advice.
NRIs and PIOs may be restricted to various extents from investing in companies that deal with real estate, agricultural, plantation activity or civil aviation in India. If you wish to invest in such businesses (and even otherwise), you should seek expert advice.
-----------
Tax for Non Residents
Becomming an OCI will of itself have no bearing whatsoever on your tax status.
This is a very complex area and it is best to get professional advice.
This is to provide rough pointers. For more detailed information - here is an official Income Tax Government Guide:http://www.taxmann.com/TaxmannDit/IntTax/nrcont.aspx
For tax purposes in India, you are considered a resident if you spent 182 days in a financial year 1 April to 31 March in India. You are also considered a resident if you spent 60 days out of the last financial year, and 365 days out of the last 4 years. Otherwise you are a non resident (NR).
There is a third status "Resident but not ordinarily resident (RNOR)", if you are resident as per above rules, but over the last 10 years, 9 of those years you were non resident, or if in the last 7 years, you spent less than 730 days in India. An RNOR is basically a NR who has just settled in India, and is treated similar to an NR for tax purposes.
So your status for tax purposes (Resident/NR/RNOR) is independent of NRI/OCI/PIO/Foreigner.
You basically do not need to file tax returns if you are non resident, and your income is entirely from investment income, long term capital gains, or tax was deducted at source (e.g. NRO account). Again please check.
If you have other income, the income tax is reduced and simplified for non residents. You may need to file a return - and the assistance of an tax accountant is recommended.
A PAN (Income Tax Permanent Account Number - Similar to social security number) is a must if you will be filing a tax return as a resident. Apparently you are exempt from a PAN if you are non resident (NR), and supply a copy of your passport with your return. It is hard to get a PAN as a non resident, though a resident tax accountant may be able to assist.
You need to consider foreign income for you local taxes in your country. Many countries have tax treaties with India (including the US) so keep these in mind when filing tax returns. General policy for most countries is that income is not taxed twice.