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HOME | MONEY | TAX | NRI TAX CENTER |
April 26, 2000
Banking |
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 work for a US-based firm which is a public limited company with its head office in India. I get all my salary in USD. I was recently covered under ESOP and the stocks were offered at discounted price to us. I have bought some shares from this scheme and have paid the cost in USD from USA directly to the company. — Sandeep Tibrewal
The taxability of income is determined by the residential status of an individual. You have not given your precise residential status nor given adequate data for us to determine your status. Can an ordinarily resident Indian be eligible to hold dollar denominated stock options issued by an MNC? Is clearance under FERA and the IT Act required?
— Sailesh Gadia The newly enacted FEMA, 1999, specifies that the RBI may by regulations, prohibit, restrict or regulate the transfer or issue of any foreign security by a person resident in India or by any branch, office or agency in India of a person resident outside India. Hence, subject to conditions laid down by RBI, a resident Indian may be eligible to be allotted $ denominated stock options. The permission for allotment is usually taken by the employer.
Taxability of income is related to the residential status. The taxability of stock option would be as under if you are a resident in India. I have been an NRI for more than two years and will soon be returning to India. If I sell my investments in US stocks and securities while in India, what will be the tax implications? Can I maintain a bank account in the US on returning to India? Do I have to inform the tax authorities in India about me returning to India?
— Vipin Kamra
NRI's who are returning to India after having stayed outside India for a minimum period of one year are allowed to retain their foreign assets after returning to India. The tax implication is dependent on the residential status of an individual. Resident Indian is taxed on his global income.
Taxability of income is related to the residential status. The taxability of stock option would be as under if you are a resident in India. Is RBI permission required for an NRI to buy shares in the secondary market even if the sale proceeds are not intended to be repatriated? The the RPI form a blanket permission to deal in secondary market or specific approvals for a company's share? Is the RBI permission to be obtained before the purchase?
— John Varghese
My brother is an NRI and does not have a bank account in India. He is interested in opening a broking and a bank account here. What are the specific approvals to be obtained from agencies like the RBI? — Eashwar
RBI permission is required for purchase of shares in secondary market. In order to avoid refernces for specific approvals for each transaction, the RBI grants general permission to the NRI's bank in India whom he should authorise to undertake the purchase and sale of shares on his behalf. Application for such permission should be made in the prescribed NRI form to
The Controller
The above mentioned Form is for investment on non-repatriable basis. If investment is required on reptriable basis, separate application is to be made in Form RPI to the above office of the RBI through the designated branch of the bank.
Send in your questions to perfin@rediff.co.in |
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