Returning to India? Know your tax liability well

With India becoming a hotbed of financial activity and economic growth, many non-resident Indians (NRI) are now migrating back to India. However, the tax liabilities awaiting them once they are back home may turn it to a bitter sweet pill, as they signal the end to the tax-free years that they have been enjoying abroad in most cases. So, if you are one among the many looking to return to Indian shores, know your likely taxability. Taxation bodies for returning NRIs There are two stipulated taxation bodies that govern all the taxation and foreign investments of NRIs—the Foreign Exchange Management Act (FEMA) and the Indian Income Tax Act. So, as a returning NRI, you will have to comply with both FEMA and Indian IT Act regulations while making your transit. All your foreign investments and transactions outside India, like real estate, bank accounts, market investments like mutual funds, business income, etc are all covered under FEMA. The taxation aspect for those as well as your Indian assets and money in India are regulated under the Indian Income Tax Act.

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