Mukund, a software engineer was campus recruited by an IT company in India in 2019. Post covid, like many others, Mukund was selected for a long term assignment in the onsite team and he was more than happy to grab the opportunity. Mukund has a couple of SB accounts, a PPF account and some SIPs in mutual funds. What should he do about these accounts? Would there be a problem if he does not communicate to the banks about his change in residential status?

Going abroad to pursue education or employment is a dream come true for many. With the advancement in technology and information available to Governments and agencies across the globe, it become all the more critical to keep compliances on track wherever we go. This would go a long way in avoiding time spent on responding to queries from the Government and Tax department to clarify one’s position.

PURPOSE

Residential status under the Income Tax Act is determined to arrive at the taxability of income with respect to an assessee. Whereas residential status under FEMA is determined for every cross border transaction undertaken.

BANK ACCOUNTS

When an individual leaves India for employment or business or vocation or for any other purpose which indicates his/her intention to stay abroad for an uncertain period, FEMA (Foreign Exchange Management Act) requires him/her to designate the existing bank account to an NRO account (Non-Resident Ordinary Rupee Account). An NRE Account (Non Resident External Rupee Account) or an FCNR (Foreign Currency Non-Resident Account (Banks) Scheme) can be opened afresh. 

If an NRI (under the FEMA) fails to convert Bank Accounts to NRO/NRE as required, he/she may be liable to penalties. 

PPF 

A PPF account opened when an individual was a resident can be maintained till maturity on a non-repatriable basis (no remittance outside India). 

INVESTMENT IN SHARES & MUTUAL FUNDS 

Mutual Fund Houses and Indian Company where investments are held as shares will have to be informed about the change in residential status. 

How can we help you?

Various clauses from the Income Tax Act may be simplified in online contents. But most of the time, it requires professional help in identifying suitable route for specific instances. Similar to nurturing and taking care of personal health, it is important to also keep a tab on one’s financial health. We at Chockalingam Unnamalai & Associates, can help you understand the pros and cons of various choices you make in the context of personal taxation. You can bank on us for a stress free tax filing and related compliances.

Call us at +91 73050 56628 or drop a mail to frontoffice@onesourcevault.com

ITR Filing – Why choose us?

SEAMLESS

Effective compliance is a key pillar for growing your finances and career/business. Tax compliance in particular could be cumbersome and at times very stressful. We help you to navigate through the maze of changes to tax laws with ease.

SWIFT

We understand and operate on the principle – “Time is money”. We have a reasonable turnaround time (TAT) which ensures timely tax compliance.

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We understand the importance of data security and hence operate in a data-secure environment. Onboard us and experience certainty and value for money!

CA Chockalingam K
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