Monthly Archives: August 2020

[vc_row][vc_column][vc_column_text]NRI Inc. helped NRI to remit funds on Sale of Property without waiting of Lower TDS Certificate

Facts of the case:

NRI wanted to sale his property amounting to Rs 2.00 Crores and had applied for Lower deduction of Tax on 20.02.2020 to enable deduction of less than 20.8% of TDS.

The Registry date was 12.03.2020 and the client approached us on 28.02.2020. Further, he had to leave few days in advance for his hometown due to a global pandemic, which had started spreading globally.

The client had applied for the Lower TDS deduction which normally takes 30 days to get processed.

 

Outcome:

NRI Services Inc. analyzed all the information provided by the client

 

By making use of certain Apex Court judgments and the intricate provisions of Income Tax, found out solution to enable client get the maximum proceeds from the sale of property.

 

As a result, the NRI Client did not have to wait for lower TDS deduction and was able to remit the complete sale proceeds from sale of property. NRI Services Inc also got his remittance documents processed within 2-3 days.

 

Not only he reached home safe and sound, but NRI services Inc took care of his worry of TDS deduction and also avoided the blocking of his funds in the form of TDS Credit. The money had reached his bank account before he could reach home.

Further, the client did not had to again get the remittance of the funds back after the due TDS claim, as and when it would have got credited to him.[/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_column_text]Presently, an Income Tax Assessee can only file return for last 2 years and claim refund if any due and not beyond that. In case he missed to file return within prescribe timeline he has no choice other than to forget his refund claim. Income Tax Department in Latest circular No 9/ 2015 has guided on how an assessee who has failed to file return and claim Refund according to section 119(2) (B) can now make an application and get Refund due up to last 6 Assessment years.

 

STEP ONE: FILE AN APPLICATION

In case the amount is less than Rs 10 Lacs for any one assessment year, the application shall be made to the Pr.CIT/CIT. CIT will review the application & communicate with reason for acceptance/ rejection of such applications/claims. In case the amount is more than Rs 10 Lacs the Application shall be made to Chief Commissioner of Income Tax. In case the amount is more than Rs 50 Lacs than the application has to be filed with CBDT.

 

STEP TWO: FILE ITR UPTO LAST 6 YEARS

Condonation application can be filed up to six previous years. Even Loss can be claimed for carry forward. The officer will ensure that the income/loss declared and /or refund claimed is correct and genuine and also that the case is of genuine hardship on merits.

 

STEP THREE: CLEARENCE FROM AUTHORTIES

The power of accepting or rejecting the condonation application of delay shall be subject to following Condition that the Income of Assessee is not assessable in the hands of other person under any provision of Income Tax Act. Further no interest will be admissible on belated claim of refunds and the refund has arisen due to excess payment of Advance Tax or Self-Assessment Tax or due to excess deduction of TDS.

 

STEP FOUR: SUPPLEMENTARY CLAIMS

A belated application for supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided other conditions as referred above are fulfilled. Assessee will not receive interest on belated claim of refunds.

 

STEP FIVE: CUMULATIVE INTEREST BEYOND SIX YEARS

In the case of 8% Savings (Taxable) Bonds, 2003 issued by Government of India opting for scheme of cumulative interest on maturity but has accounted interest earned on mercantile basis and the intermediary bank at the time of maturity has deducted tax at source on the entire amount of interest paid without apportioning the accrued interest/TDS, over various financial years involved, the time limit of six years for making such refund claims will not be applicable.[/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_column_text]The Union Cabinet on Thursday approved a relaxation of policy on investment proposals from Persons of Indian Origin ( PIOs) and Overseas Citizens of India ( OCIs), treating them at par with Non Resident Indians ( NRIs) in this regard.

 

The amendments will lead to greater foreign exchange remittances and investment. The investment under the amended norms will be treated as domestic at par with investment made by resident Indians.

 

NRIs are Indian citizens; the other two are not. “ The decision that NRI includes OCI cardholders as well as PIO cardholders is meant to align the Foreign Direct Investment ( FDI) policy with the governments stated policy to provide PIOs and OCIs parity with NRIs in ( the) economic, financial and educational fields,” was the official statement after the meeting, chaired by Prime Minister Narendra Modi.

 

The government also approved an amendment to Schedule 4 of the Foreign Exchange Management Act (FEMA) Regulations, that NRI investments would be “deemed to be domestic investment made by residents”.

 

“The measure is expected to result in increased investments across sectors and greater inflow of foreign exchange remittance, leading to economic growth of the country… This will enable investments by NRIs, OCI cardholders and PIO cardholders under Schedule 4 on a non repatriation basis, across sectors, without being subjected to any of the conditions associated to foreign investment,” the Cabinet said.

 

The idea is to encourage NRIs owning business ventures abroad to put money here, too, by giving them domestic investment treatment. Presently, under Schedule 4 of FEMA, investments by NRIs are made on a non- repatriation basis, though it has not been provided that these are domestic investments.

Between April 2014 and February 2015, the FDI equity inflow was $ 28.8 billion, a rise of nearly 39 percent over the same period in 2013- 14. The government has tried to liberalize the FDI regime. In its year in power, the FDI limit in the defence sector has been raised to 49 per cent, up to 100 per cent has been permitted in railways and norms pertaining to FDI in construction development were liberalized. And, FDI in the insurance and pension sectors have been permitted up to 49 per cent.[/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_column_text]The Finance Ministry has made life easier for the Indian Reporting Financial Institutions (RFI) to comply with the Inter-governmental Agreement (IGA) under FATCA in situations where US Tax Identity Number (TIN) is not available for pre-existing accounts (as of June 30, 2014)

 

It has now advised RFIs to insert nine capital letters eg (i.e AAAAAAAAA) in the TIN field (for the account holder or controlling person, as the case may be) for such accounts in their reports in Form 61B, provided certain conditions are met

 

An official release specified the three conditions as follows: (1) The reporting Foreign Financial Institution (FFI) obtains and reports the date of birth of each account holder and controlling person whose US TIN is not reported. (2) The reporting FFI requests annually from each account holder any missing required US TIN; and (3) The reporting foreign financial institution should before reporting information relates to calendar year 2017 to the partner jurisdiction, searches electronically searchable data maintained by the reporting FFI for any missing required US TIN.

 

Adhering to this practice — so long as the three conditions are met — would ensure that the Competent Authority of USA will not determine significant non-compliance with the obligations under the IGA solely because of a failure of a reporting FFI to obtain and report each required TIN.

 

India and the US have signed the Inter-Governmental Agreement (IGA) under FATCA in 2015. To enhance the effectiveness of information exchange and transparency, both the sides committed to establish, by January 1, 2017, rules requiring their Reporting Financial Institutions (RFIs) to obtain the Tax Identity Number (TIN) of each reportable person having a reportable account as of June 30, 2014 (pre-existing account).The Income-tax Rules, accordingly, provide for reporting of US TIN from the year 2017 onwards in respect of any pre-existing account.

 

The US-IRS has issued guidelines through Notice 2017-46 dated September 25, 2017 providing relaxation to Foreign Financial Institutions (FFIs) with respect to reporting of US TIN for calendar years 2017, 2018 and 2019

Now the Competent Authority of USA will not determine significant non-compliance with the obligations under the IGA solely because of a failure of a reporting FFI to obtain and report each required US TIN if these three conditions are met.[/vc_column_text][/vc_column][/vc_row]