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The Rediff Money Channel presents everything you wanted to know about tax issues, but didn't know whom to ask. Chartered Accountants from Ganesh Jagadeesh & Co are here to remove all your doubts.

Readers' Note: Please keep your questions short.

I'm a student in Washington DC, receiving a tuition remission for my studies along with a stipend. Part of the remission along with the total stipend is taxable. I also pay for my courses, which is in fact equal to the amount of stipend that I receive. I also have part time employment that adds to my income. Is there any deduction that I can claim for?

— Sumeet Chawla

As per the Indian Income Tax Act, there is not specific provision for any deduction in your case.

I am working in Indian software company. Recently I had to come on a three-month assignment to US. I was paid daily allowances for my stay in US. My Indian salary continued to be paid in India. From the daily allowance, some amount is remaining. How should I get this money back to India? Also, what conditions should I fulfil as to convert this money to Indian rupee and deposit it in my bank account?

— Ravindra N

You can either get it back in the form of travellers cheques, currency or draft which, should be surrendered immediately upon return. The formalities can be known from any of the Indian banks operating at your place or from an Indian bank.

I am a Indian passport-holder living in Singapore. Though I am working for a company in Singapore, they will be posting me to India for a period of more than two years. I am required to pay tax in Singapore as I am to serve a bond of working for a Singapore registered company during the same period. I would like to know if India has any reciprocal tax arrangement with Singapore such that I would not have to pay taxes on my income twice.
I would be earning my salary in Singapore dollars and repatriating it to India every month. From my understanding I would be classified as a resident Indian since I will be in India for a time longer than 182 days - hence, the question. Also, will it help if I take up permanent resident status in Singapore?

— Himanshu Chaturvedi

There are various provisions under section 10 of the Income Tax Act, 1961 which provide for exemptions on income under different circumstances. We would be able to express our opinion only if we have full details about your employer, terms of contract and the Indian party for whom will be working.

Let us say an NRI in USA opens a FCNR dollar cumulative deposit long-term (5 years). The person comes to India after opening such an account. He/she becomes RI. But before the FCNR maturity, he/she returns back to US to become an NRI again.
After the person's return to US the cumulative FCNR matures. Can the person now get back the FCNR proceeds as US dollars in US? What are also tax implications in India ?

— Lakshmi Narayan

Since the fixed deposit was opened by an NRI even after he returns to India he can still maintain the NRI Deposit only if he retains it till maturity. In the present case the NRI will be allowed to retain the NRI FD. Incomes accruing to you on deposits will also be exempt under section 10(15) (fa) till the time you do not become an Ordinary Resident.
Since the person becomes NRI again, his FD on maturity will be credited to his NRE account and he will be allowed repatriation of the same.

I am an NRI based in the Netherlands since Feb 4, 1998 with occasional visits to India. I came here on deputation from an Indian firm which continue to pay my Indian salary and TDS and form-16. Here I am getting an allowance from a branch of the same company (but incorporated under Dutch Laws) and they are paying tax on this to Dutch government (receipts of which I can not get). I manage to save some amount from this allowance and send it to India. Do I need to show this saving in my tax returns? And, if yes, how? What are the tax implications? Do I need to pay additional tax on this?

— Rupak Rathore

Since you are NRI all incomes that accrue to you outside India is non-taxable. Whereas all income accruing through India is taxable. Your employer is deducting tax from your salary income and is also issuing form 16 to you. The income that you earn in the Netherlands viz certain allowance, the same will not be taxable in India since you are an NRI and the allowance received is outside India. Had you been a resident on deputation then such allowance would have been taxable in India.

Is money in an NRI account taxed?

— Karthik Kulavalli

I will be working in Japan for around a year. Could you please tell me about the pros and cons of NRE and other NRI accounts. My banker in India had told me that on the NRE account there will be a 33 per cent tax on interest.

— R Nachiketa

In case of a person resident outside India, income from interest on moneys standing to the credit in a NRE a/consumption in India is exempt from tax under section 10 (4) of the Income Tax Act 1961.

According to the rules published by RBI, amount standing in NRNR deposits can be gifted one time only. What does 'one time' mean? One time every year to the same individual?

— Viswanathan Krishnamoorthy

The deposit will be exempt from gift tax for one-time gifting. Thus, if you gift it more than one time then such gift will be taxable. However, since Gift Tax Act has been abolished, gift tax is no more applicable. Now we feel you can gift the amount lying to your NRNR account on more than one occasion.

I am a green card holder and getting ready to file for citizenship. I am planning on sending some money to my family in India. Is there a limit on how much money I can send either to my father or my brother as a gift?

— Rajan Natarajan

The Gift Tax Act has been abolished with effect from October 1, 1998 and there is no Income Tax chargeable on the recipient of the gift. There is no limit on the amount of gift you can give.

I left India on October 6, 1997 for Korea and working as United Nations Volunteer (UNV). As UNV I am not getting any salary but only living allowance. As I left India after September 30, 1997 (which means I spent more than 182 days in India for financial year 97-98), do I need to pay any income tax on living allowance which I got from October 97 to February 98? If yes, How much?

— Vinay Gupta

Allowance received from United Nations Organisation is not taxable by virtue of Section 2 of the UN (Privileges and Immunities) Act, 1974. Hence, irrespective of your residential status the allowance received by you will not be taxed in India

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