RBI in a bi-monthly Monetary Policy Statement on June 3, 2014, announced 3 important measures related to Non Resident Indians (NRI), Foreign Portfolio Investors (FPI) and foreign exchange remittances by Resident Indians:
1. Last year, to stem rupee depreciation and restrict outward remittances, the eligibility limit for foreign exchange remittances under the Liberalized Remittance Scheme (LRS) was reduced to US$ 75,000 last year. With the recent stability in the foreign exchange market, RBI decided to enhance the eligible limit to US$ 125,000 without end use restrictions, except for prohibited foreign exchange transactions such as margin trading, lottery, and the like.
1. Last year, to stem rupee depreciation and restrict outward remittances, the eligibility limit for foreign exchange remittances under the Liberalized Remittance Scheme (LRS) was reduced to US$ 75,000 last year. With the recent stability in the foreign exchange market, RBI decided to enhance the eligible limit to US$ 125,000 without end use restrictions, except for prohibited foreign exchange transactions such as margin trading, lottery, and the like.
2. RBI allowed foreign portfolio investors to participate in the domestic exchange traded currency derivatives market to the extent of their underlying exposures plus an additional US$ 10 million. The measure was announced with a view to improving the depth and liquidity in the domestic foreign exchange market. RBI also allowed domestic entities similar access to the exchange traded currency derivatives market.
3. Non-residents visiting India were not permitted to take out any Indian currency notes (INR) while leaving the country. Only Indian residents were allowed to take Indian currency notes up to Rs. 10,000 out of the country. With a view to facilitating travel requirements of non-residents visiting India, RBI allowed all residents and non-residents except citizens of Pakistan and Bangladesh to take out Indian currency notes up to Rs. 25,000 while leaving the country.
Detailed operating guidelines for all the above measures will be issued separately.
Hello ,
We are currently residing in AZ ,USA and planning to buy a property using funds from sale of property in India ( $250K) . I would like to know the best option to transfer this to US . Are there any tax implications in US for the money transferred from India.Appreciate your input .
As you are a NRI the forex remittance limit of $125,000 would not apply to you. This is for residents only. Your limit for transfer of funds is US $1 million. You would need to pay the tax before transferring the after-tax amount or take a chance (ready for multiple years and/or rounds of appeals) if you want to claim deduction of buying property abroad to save capital gains tax in India. Thanks.
Hi, I am a NRI living in Anchorage, AK. Recently on my visit to India, I wanted to buy mutual funds from ICICI and Axis. The ICICI branch manager told me that the NRIs living in USA and Canada cannot buy Indian mutual funds. It does not seems right. Can you please clarify? Kindly let me know the procedure for buying MF for US-NRI, since they did not opened my demat account.
As per RBI rules, any NRI can invest in or buy Indian mutual funds. Due to regulatory or bank specific issues, certain bank may not offer the service to NRIs or to NRIs from certain countries. Also, certain mutual funds may or may not accept funds from NRIs of certain countries. While you are allowed to buy Indian mutual funds, you may not be able to invest in ICICI mutual funds as they do not allow US based NRIs (ICICI has a JV with Prudential and Prudential being a US based company is not allowed to solicit funds from US residents outside US). However, you may be able to invest in schemes of other fund houses such as Birla, HDFC (no NFO), IDFC, Sundaram, etc. Let me know if you need any help with investments. Thanks.
Hello ! I am taking loan of around $40k from my relatives and friends in US which I will return in a few months. Is it ok to receive money in my savings bank account in India thru online transfer and then return after sometime. Is there any tax or foreign exchange issue involved
I would assume that you want to borrow funds in US, transfer the funds to India and then payback after sometime. If you will be using the funds you sent to India to payback loan, I would suggest to transfer the funds in your NRE account as you would be able to repatriate without any restrictions or documentation. For India, you brought in dollars and you are taking the dollars back. Unless you make money on the funds you sent to India, no tax is involved. Thanks.
Hi,
You have mentioned that one may not remit foreign exchange for margin trading.
I have a unique issue. I am an NRI about to return to India. I trade in margin instruments and derivatives at the moment. So I already have a fx trading account right now. If I were to return to India and become a resident Indian, can I continue trading in FX, margin trading etc with my funds already abroad? I will not be sending out any money outside India. However, any profit will be brought into India and tax paid.
Please advise. Thanks.
1. When you return to India, your status would not change immediately to Resident depending on when you return. Also, residency requirement is different under Income tax Act and FEMA.
2. Whether you will be able to invest in Indian or Foreign securities or not would depend on the FEMA. Any trading in foreign securities on the exchange is allowed by residents. Also, NRIs are allowed to invest in exchange traded derivatives in India.
3. Taxability of income will be determined by the Income tax Act. Please contact your CA for details. If any question, do let us know.
Hi,
I think I haven’t been clear. I do not wish to trade on the Indian Exchanges. I intend to trade in EUR/USD, AUD/USD, XAU/USD using margin traded derivatives on exchanges abroad. I already have a broker in Singapore through whom I am trading. I have been doing so since more than two years now and was wondering if I could continue to do so upon my return to India using my funds and accounts abroad. No money would be remitted out of India. Profits would be brought back in, and IT paid on the same.
Thanks.
You may continue do that until your residential status is “Non-Resident” under FEMA. FEMA does not allow residents to trade in foreign currencies. Thanks.
Great article and very informative site. I have a situation and would appreciate if you can help please:
I am US Citizen with OCI and came to India on vacation, however I lost my US job in this period and now I want to stay in India for few years to be able to spend time with parents and extended family and go back to US maybe after 5 or 10 or 15 years.
I do not have any job now and hence no salary, so I was thinking of transferring my US bank account savings to India.
Questions I have are:
1. If I transfer $ from US Bank to NRE a/c, do I have to transfer it from NRE to NRO since I wish to stay in India for few years.
2. Will I be able to transfer all this invested or unused money from India to US when I go back in future? Will there be any tax implication or legal issue since I would have earned interest on the money I transferred to India?
3. Actually it will be a big thing for me if I am able to get the US $ to India now since I will get decent interest to manage day to day expenses. Is there any other point or tax implication that I need to consider?
Thanks & Regards.
1. If you have come to India and wants to stay in India for an uncertain period, you would become “Resident” in India under FEMA. As a result, you can not maintain the NRO, NRE or FCNR accounts but need to transfer funds to your resident account (in INR) or Resident Foreign Currency (RFC) account (in foreign currency).
2. There is no tax on transfer. Tax is on the income. And, as per current provisions, if taxes have been paid, NRI can remit upto US $1 million. The provision may change in future.
3. Yes you can bring the money to India. If you need any help with investment consulting to get better after-tax return, let us know. Thanks.
Thanks Much for your prompt response.
Per your response to point 2, it is good to know that we can remit upto US$ 1 million from India to US as of now.
I will need help with some investment consulting, will reach out to you on your contact # in few days time.
Once again, appreciate your help.
Regards.
Hi Mr Patel,
Thank you for your very informative blog.
My elderly parents are in the process of selling their home in India and moving all of their funds to the U.S.A. They are both green card holders .
Can they move all the funds (after taxes) from the India bank account to their US bank account or does the RBI rules subject them to a limit ?.
Regards,
Ronald
Your parents will be able to move all their funds to the USA after payment of taxes. As they are NRI, TDS needs to be deducted of the tax amount. For them The limit for transferring funds to USA is $1 million. The limit for $125,000 is for residents. Contact us if you need any help with TDS, taxation of sale of property or transferring funds to USA. Thanks.
can an indian resident trade in U.S commodity futures doing intraday trading by remitting margins from india by taking permission from Rbi
After taking permission from RBI, you can do anything as permitted. Thanks.
Thanks for this excellent blog. Can you please let me know how can I obtain RBI’s permission to keep an overseas margin account. I am in US (Indian citizen) and currently trade US futures and options (in margin account) and would like to continue it after relocating back to India. Also, what is the duration of the permission – is it one time or valid for many years. Thanks for your help and shining light on this complex subject.
Thanks.
You can contact your regional RBI branch/office for the same. RBI is very co-operative and will explain in detail about the process and forms required/how to get the approval. Please note that you may continue to trade if your status is a non-resident as per FEMA/RBI. Thanks.
Thanks Jigar. I will try that.
Dear Sir,
I am Indian resident and i trade in commodity segment in MCX for past 3 yrs. Now i want to trade in US futures market. According to RBI LRS Indian residents are allowed to remit funds for investment in stocks but prohibited for margin or margin calls to overseas exchanges. Did RBI gave permissions for margin trading? And Can i invest the profit of stock trading to margin trading? As it is allowed to invest in stocks. Kindly clear my doubts.
If RBI does not allow something, the source of funds in immaterial. Thanks.
Respected Sir,
I have formed a pvt ltd company (One Person Company) specially for trading binary options and broker is cyprus based, but yet i have not yet started trading because application for business commencement certificate is not submitted.
Am i contravention any law if i remit outside india but i am trading as a corporation. Please suggest.
What is the person who approached with this plan say? Also, Cyprus is a “Notified Jurisdiction Area” i.e. blacklisted by India for not providing information on tax evaders. Thanks.
Hi,
I’m an Indian citizen and opened a forex account with an international broker. At the time of opening account I got $15 as bonus. Today, I have $ >1500. Did I do anything illegal if I withdrew some of it and bought it back to India and paid tax on it here?
Best Regards,
Rakesh
1. The question of legality comes when you invest through international broker and trade in forex. It does not arise at the time of withdrawal.
2. You would pay the tax on the transactions entered by you during the year. Income tax is on income and not on withdrawal. Thanks.
ithdrawal is
Hello,
Thanks for this helpful blog, truly informative. I am an OCI in US. My cousin, resident in India, has recently lost his job and is trying to sell his flat to pay off his mortgage, but selling will take time. I am thinking of helping him out with a personal loan (preferably by remitting from my US bank account via xoom.com directly to his mortgage lender bank in India) to pay off the Rs 35 Lac balance of his mortgage. This will relieve him of monthly mortgage payments while he is in the process of selling the flat which could take a few months. After sale, he will repay me the amount I sent. Would he be able to repay by means of outward remittance directly from his Indian bank account to my US bank account ? We’re wondering how best to go about this so that there would be no problem with outward/return remittance, and no tax implications for me. I don’t currently have any NRE/NRO accounts – would these be even necessary for this scenario ? Would very much appreciate your insight.
1. You and your cousin are not a close relative under FEMA and as a result, you may not give loan on a repatriation basis. Your loan to him would be on non-repatriation basis only.
2. The best way to go about the transaction would be that you transfer the funds as a loan to your cousin’s savings account. He would make payment to the mortgage lender bank; instead of directly transfering funds to the bank.
3. I would suggest you to wire the funds (pay $40 or so for international wire) and NOT use a third party money changes. For higher amount, you can negotiate with the bank where you are transferring the money for better exchange rate. My experience is that your average saving would be 50 paise (75+ paise also) and if the transfer is $50,000, you end up saving 25,000 (way more than 2500 spent on international wire).
4. Only when any income is involved, you need to consider the tax implications. If there is no interest or other benefit, there is no income and no tax implications.
5. You do not need NRO/NRE account for transferring funds to your cousin. As your loan will be on a non-repatriable basis, when the amount is returned to you, it can only be credited to NRO account. Thanks.
Thank you very much for the guidance. Just a couple of follow-ups, if I may (thanks!).
On #2: sending the funds to my cousin’s account is suggested — it this because it establishes more clearly (for any documentation/proof purposes) that I’m making the loan to him ? [ Sending to his mortgage lender bank has one small advantage in that it would ensure that the funds reach the final destination ].
On #3: My bank (HSBC USA) quoted me a Rs53 (!) exchange rate yesterday for USD, whereas xoom.com and remit2india show about Rs60. I guess I will need to shop around other wiring banks. If, hypothetically speaking, exchange rates are approx equal (between Wire Vs xoom.com), does Wire still hold some advantage in terms of any documentation/proof that may be needed later ?
On #5 : Once the amount is returned to my NRO account, can I then repatriate it back to my US account ? (The amount is well under the $1M limit, but you’ve mentioned ‘non-repatriable’, which seems to imply I cannot bring the amount back to US).
I would be very grateful for any clarifications on the above. Thanks !
1. That is the right way and establish a good money trail. Also, you need to comply with other RBI regulations.
2. I sincerely doubt that. You need not contact your bank in USA but the bank in India where you plan to transfer funds. You would definitely get better rates as banks in India are in need of foreign exchange. If you convert in USA, as they may not have INR, they give you really bad rate.
3. Yes you can but only through NRO. Thanks.
hello,sir
i need your response for this information
sir,i use to have capital for forextrading in overseas by posting on forums or else by winning in contests
so i trade with it and earn
but since several days,as forex is told illegal in india.this making me worry
but confidence i have is,i never used indian currency for deposit or trading in forex.
i only use my contest winnings and bonus posting capital
(as far as i am concerned i am not harming indian currency as i have not used it for deposit and trading and rather i do earn dollars and trade with it so when i bring that it will add economy to country as bringing in currency-i am not sure the matter i said was true or not but its my feeling)
so i want information from you now that
can i withdraw to my indian bank and pay taxes for it?
will there be any problem if we do like that?
and also if i want to pay tax when earned more than rs.2,50,000 within a year
then what are needed for paying tax?
i.e do i need to show the statement of trading or what
i.e i mean what are things i need to submit while filing a tax return
please answer me all questions and i really appreciate your answer
and thanks in advance
Your query is confusing. Please repost with your situation and questions. Thanks.
Dear Sir/Madam,
I am Indian resident and i invest through foreign currency broker ‘FXCM’ long days back..now i want to receive through my saving accounts…..USD 20000. kindly help me how can i show this amount as legally.. and what is tax calculation..
As long as you invested legally and shown any profit or loss on your investments in your income tax returns annually, it is a legal amount. Tax is only on the income and not on investment. Thanks.
Hi,
I was worked in Australia from 2007 to 2010 and i have some money in superannuation.
now i am planning to with draw that money, please let me should i need to pay tax in India for that money.
Thank you
As you have been in India since 2010, your residential status as per Income tax act is “Ordinary Resident”. As a result, your global income is taxable in India. Your money in superannuation or any account, earned while you were a non-resident is not taxable in India. However, any gain may be taxable as global income is taxable for Ordinary Residents. Thanks.
Hi, I am an NRI living in Dubai. Every month I save a little portion of my salary and remit back to India for future savings. My question is Can I book forward contracts for my future receivables (salary) as I am of a view that INR will strengthen against USD in future. Am I allowed to do so, if yes than how should I go about it.
I checked this with some of my bankers in India, however I am unable to get a view on this.
NRIs can only invest in exchange traded derivatives in India. Please contact your bank in Dubai and they may be able to help you. Thanks.
hi sir,
i have got some savings which i want to invest in forex, eru/usd market. my broker is based in uk FXPRO LTD.
how can i do this?
can you help me stating the process??
Please check with your broker. Thanks.
brokers are okay with it but as my account is in usd i have to make deposit in usd but rbi doesnt allow remit for trading as they dont want currency conversion….so is der any way i can make depositss??
You may want to contact a bank that handles foreign exchange. I think Interactive Brokers allow and has a process for residents to trade online in foreign securities. However, if RBI doesn’t allow, you may not be able to trade. Thanks.
hello sir,ok to say you understand
in india it is told not allow to trade foreign exchange in overseas
but my question is
i am not using my indian currency for trading in overseas market,i am using money from contests winning and other program which are earned online
and which are in dollars
so if we trade with these dollars and after i withdraw profits to india will there be any problem?
is this a violation?
if not a violation,then how to pay taxes on it and also what needed to submit to tax department for filing taxes
the above is my question and hope you understand this time
now,the below is my view on my above question:
as far as i belive i am not using indian rupee or converting it and trading,so i am not harming indian economy
and rather when the earned dollars are brought in india,it adds the economy what i feel
so,finally please answer your view on my topic because i need perfect answer
The first question is Whether a law applies to you or not. And, it depends on whether you are a resident or non-resident as per FEMA/Income tax Act. If you determine that you are not allowed, the source of funds is immaterial. Thanks.
sir,i am resident indian only and i wnat to know what exactly you mean
actually i earn through contests online and thus want to withdraw money earned in forextrading by investing capital from contests winnings
i never used indian rupee to trade in forex
so say me clearly will it a violation?
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8427&Mode=0
this is what rbi says
i.e they are worried when rupee invest in forex and if people lose in forex then rupee was lost
but in my case i am not using rupee and at same time when i earn and withdraw to bank in india,it adds additional money to india as those will be in dollars
please try to understand my question and answer
I am an NRI presently working in Dubai. I want to know is NRI allow to transfer his Lottery winning ( $1 Mil. ) to his NRE Account in India. What will be legal issues, do I need to pay the Income tax on this Amount. Do I allow to use this funds
1. To Make FD.
2. To Buy Immovable Property
3. To Invest in Shares.
Yes, he can transfer. Any income outside India is not taxable in India for NRI. He can do whatever. If you need our advise about investing in India, let us know. Thanks.
Excellent and very informative site. Thanks for very neat and detailed explanation on the FOREX Trading part.
I have been an active Day Trader for the last 2 years, and have been wanting to trade in FOREX.
If I understood correctly, I can open and trade in FOREX even as a Resident Indian as long as I am not converting INR to say USD to fund my account.
I being a consultant also get paid in USD and Euro, Can I open an offshore account in say USD, get my bills deposited to this offshore account and use that to fund my FOREX account?
Will that be legal? Can I show the profits arising from FOREX Trading as income in India, pay taxes and be able to enjoy my earnings without any issues?
Thanks in advance.
I would suggest you discuss with your CA and/or your RBI/FEMA consultant. Thanks.
Hi, JP,
My questions is on legality & withdrawal of forex profit from offshore broker into NRE/NRO account in india for NRIs.
I am an NRI and wanted to do some investments in forex trading via offshore broker. as a being NRI – i am staying outside of india. and i can fund initial deposits into my acc account as my local currency – otherthan-INR. my question is, is it legal to withdraw profit via NRE/NRO indian bank a/c. and is NRI participation in offshore forex trading considered to be legal.
Thank you.!
As an NRI, you are free to do anything that is allowed as per your country of residence. As an NRI, you are allowed to transfer funds from NRO to NRE and also remit funds out of NRE to abroad in any foreign currency. Also, your limit to transfer funds is $1 million per year. $125,000 limit is for residents. Thanks.
Sir,
i am an NRI and have a work visa, invested in forex and now withdrawing profit from Broker to NRE A/C. got an email from the bank. requesting Purpose of remittance/purpose code. but i could not find the clear purpose code from the list. could you please suggest?
I don’t think you can trade in forex as an NRI and credit the funds directly in the NRE account. Also, I think you may need a CA certificate for crediting funds in NRE account as the trading could have resulted in profits on which you would be required to pay tax in India. Please contact your CA. Thanks.
Dear Sir,
Am an Indian Citizen, currently residing in the US under a H1B Visa and working there for over 8 months now. I have the following question.
If I win a lottery in any one of the States in US, (say out of funds from my salary paid to me in the US) and receive the money (prize money) into any bank account in the US. Can I then transfer some of these lottery winnings to my NRE account in India ? If so, should I do it in USD or INR? Is there a limit?.Is it taxable?..Is there any way to do this at all ?
I did read in the FEMA Act that withdrawal of foreign exchange for the purposes of remittance out of lottery winnings and remittances for the purchase of lottery tickets are prohibited under FEMA.
Grateful if you can respond to my query ?
1. As you have stayed outside India on an employment visa for more than 6 months, you are an NRI. For an NRI, only Indian income is taxable so your salary or lottery would not be taxable in India. However, you would have to pay tax in the USA.
2. You are allowed to transfer ANY amount to NRE account in India. There is no tax on transfer of funds. Tax is on the income.
3. NRE account is denominated in INR so while you may transfer the funds in USD, it will be converted into INR and credited in Rupees in the bank account. The interest on NRE accounts is exempt from tax. However, as global income is taxable for US residents, you would have to pay tax on the interest income in USA. Thanks.
I am currently on h4 visa and would like to remit $50,000 from my Indian account (not NRO) which is a joint account with my dad. Once I get the funds here I would like to transfer the same amount as a gift to my first cousin who is a U.S. citizen. Is this legally allowed or is there any other way I can give him the money. Also is there any tax implication at my end.
In India, the first holder owns the money. So if you are the first holder, it is your money and you can remit funds to USA. If not, you would need to determine the nature of transfer (e.g. gift/loan/income, etc.). Any foreign gift received is not taxable for US residents but you would need to inform IRS. Also, if it is your money, you would have declared it in the FBAR/Form 8938 in earlier years. Once money is in your account, you can give gift of $14,000 per person per year as a taxfree gift to anyone. For any higher amount, either you would need to pay gift tax or declare to IRS to count it against your lifetime gift limit of $5milion. I suggest you look at all the aspects of transaction, consult your CPA and make a decision. Thanks.
Very informative article and question answers. Thank you.
My query is this. I’m an NRI in the US. Can a US national remit funds to my NRE account as a gift by wire transfer?
If so, is there a limit?
Am I free to use these gifts as I please in India without any taxes?
Thank you.
Yes. and Yes. The limit is $14,000 per person per year.
However, I would advise you to accept gift in the USA only (limit and provisions are the same) and credit it in your account and then transfer to your NRE account. Thanks.
Hi..Can an Indian student in Europe play legally european or any international lotttery. Due to FEMA one cannot transfer foreign lottery win to indian banko account so can I open any foreign bank account legally & invest the money in the country where the ticket was purchased or any other country. However with foreigen lottery win can one open foreign bank account after disclsing this fact to the country of residence. Is it legal to play any foreign lottery outside of India by residing abroad as a student?
1. As you have gone out of India as a student, you are considered an NRI under FEMA. As an NRI under FEMA, you are allowd to open NRO and NRE account with a bank in India.
2. If you stay outside India of 182+ days in a financial year, you are considered an NRI under Income Tax Act. For NRIs, foreign income is not taxable in India.
3. You would need to check the country of your residence (Europe) for participating in the lottery, lottery winning and use of the money. Thanks.
hi
i want to invest in Uk ,to trade CFD ,but also they have forex product , but under the purpose code investment in foreign share portfolio is allowed ,so if i invest and while withdrawing i need to mention from which share i got profit.
http://www.cityindex.co.uk/cfd-trading/
I would assume you are a resident. As a resident, all your income would be taxable in India. Also, you would need to report any foreign assets in your income tax return in India. I don’t think you would need to declare which share you mad profit at the time of transferring or withdrawing from UK. However, you would need to calculate the profit/loss for income tax purpose. Also, please note that the restrictions are usually on outward remittance. There is no restrictions for inward remittance (foreign exchange coming into India). Thanks.
Hello,
I have recently moved to US on H1visa.
I want to send money from US to india , to pay for the home loan emis.
Should I open NRE/NRO account for remitting or remit to my existing savings account in india?
I would strongly suggest NRE account. Thanks.
sir,
I am Indian resident and I am trade with international Forex currency market like EUR-USE, and I deposited fund through third party (E-WALLET) like skrill. Long days i have make some profit of $2000. So i want to withdrawal my profit to my Indian local bank account through third part skrill.
so tell me it is legal transaction or not and what is limits and how to calculate Tax. And it’s ilegal so what should I Do.
Please help
As an Indian resident, you are not allowed to trade in overseas foreign exchange (EUR-USD) through internet or online trading portals. It is illegal and you should not do that. Please stop the trading immediately. Thanks.
Dear Sir, I have recently transferred about 20K USD to my ICICI Bank Account (Normal Saving Account) from my overseas Bank in Myanmar. Myanmar Bank account shows money debited but it is still not credited in my ICICI Bank Account. Now almost 5 days. Please advice how to take this ahead.
Please check with your ICICI bank in Myanmar and obtain the fund transfer (TT transfer) information and then fllow up with your bank in India. Thanks.
Hello Sir,
I have deposited 102.5$ in Skiill(Moneybookers) & then i have deposited this money in hotforex(International broker) for currency trading.Now i have make some profit from that and withdraw it in Skrill(Moneybookers).
Now i want to withdraw it in Indian bank, is there any problem if i withdraw this money in Indian bank. I am an Indian resident.
An Indian resident is not allowed to trade in overseas foreign exchange (forex) through internet or online trading portals. It is illegal and you should not do that. Please stop the trading immediately. Thanks.
Hello Sir! GREAT JOB!!
Sir i am akash from INDIA, resident of INDIA,
Sir, I have Deposit 300usd in FXCM platform and trading last 3 months and have gained around 2000usd. And now i want to know withdrawn all my money i.e 1300usd in my Indian saving icici bank account, will there be any problem? if yes then how i will tackle or crack, give me some solution.
An Indian resident is not allowed to trade in overseas foreign exchange (forex) through internet or online trading portals. It is illegal and you should not do that. Please stop the trading immediately else, you may be in big trouble. Thanks.
I am a Non Resident Indian for the last 33 years. I occasionally play EuroMilllions through Sydnicates. i.e. I am not playing directly but somebody is playing on my behalf who is a resident of Euro Zone. In case of a Big Win, Will I be able to receive the proceeds to my NRE Account.
As an NRI, you are not taxed in your foreign income. I would suggest you to transfer the winning amount to your foreign account and then transfer the funds to NRE. Please also contact your CA or us if the amount is BIG for better planning for transferring money. Thanks.
Hi Jigar,
I have two questions:
1. I am visiting US on business. I had spend some time with my cousin who is US citizen and has OCI. He bought me a Powerball ticket and smiled at me and said that if I win I can take the money back. That set me thinking as I have heard of FEMA rule. Now if the Lottery ticket is a gift (as he paid for it) and in case I won this how do I bring this money back to India? While the ticket is a gift and the outcome is from the gift, how does FEMA treat such cases and Income tax. Lottery winning in US is perfectly legal, they deduct the tax and give you the money.
2. Again can my cousin (who is US citizen) gift me (India Citizen) cash? What is the limit? I understand there is a 40% gift tax in US under the hands of “gifter”. Why under DTAA, it says the 1st right of taxing gift is at the hand of India. So in this case since my cousin is gifting me, Under DTAA he need not pay tax and the tax will be at hands of me in India, right? Again if he is taxed at 40% in US, do I have to pay tax again in India?
Appreciate your comments.
1. As an Indian resident, your global income is taxable in India. If any tax is paid in foreign country, you may claim it as a credit while filing your tax return in India. Also, gift received from your close relative is exempt from tax. Your cousin is not your close relative.
2. In USA gift tax is on giver so your cousin has to pay tax. As per Indian income tax, tax is on receiver. While your cousin may avoid paying tax in USA (provided he complete certain formalities), any gift from non-relative is included in your income any you would have to pay the tax. Thanks.
Jigar,
Thanks a ton.
If I understand you right. My cousin does not pay tax under DTAA or based on his life time exemption on gift tax? I am sorry to be persistent but just curious. As per DTAA the first right for taxation lies with India.
One another thing is if there is a limitation in US to the amount to give tax and in India to receive?
Once again thanks for your wonderful post.
I am sorry, my previous question, last paragraph was if there is a limit of amount you can gift to a non citizen by US Citizen and/or Indian Citizen to receive amount as gift from US as per FEMA (Exemption being non relative).
There is no distinction of US citizen or not. The rule apply to any individual. Also, FEMA would always allow foreign exchange coming in to India. The limit for gift from non-relative is under Income Tax in India and is Rs. 50,000 per year. Thanks.
Jigar, Not to beat the issue to death… based on several comments above looks like,
1. Any “inward” remittance into India from lottery won abroad (though it is legal there) is not permitted as per FEMA rules.
2. Indian resident cannot open US account to keep that money there as you need to declare the global income and thus source of income would be lottery and would be against FEMA rules.
3. Also, we cannot have someone who is citizen (Cousin) of that country claim the money on your behalf and gift you as you are only allowed to receive Rs.50,000.00 per FY from them? Anything more would be considered money laundering.
Is there a way out? Like contact your firm or any of attorney or CPA firm to help us with this? Also, I do not understand why FEMA is taking high “moral stand” rather than “economical stand” when it is not illicit money coming in to the country but the FEMA provision in fact forcing the resident Indian to take coercive approach.
Comments on above would be greatly appreciated.
1. As you are not allowed any outward remittance for purchase of lottery ticket, you can not win a lottery. And, any lottery winning would be illegal.
2. Indian resident is allowed to send money abroad for foreign assets/investments of upto $250,000 per year. But not for buying lottery ticket, which is specifically prohibited in FEMA.
3. Receiving gift from non-relative is considered as a taxable gift and included in your income in India as per income tax act.
Economically, logically and statistically, it is proven that the percentage of winning a lottery is very small and many more people have to lose so that one can win. If FEMA allows inward remittance of lottery winning, FEMA would also allow outward remittance of purchasing lottery tickets, which would be a lot more than winning (on an average over a long term period). There may be other reasons, but this is my understanding of economical/logical reason; in addition to the moral ground. Thanks.
Jigar,
Thanks. That clarifies and clear. I will ask this last question and would cease from asking any more.
Based on your answer 3. I can receive any amount of money as gift from non relative, correct? The tax exemption is up to Rs.50,000.00, rest of the money will be taxed. In essence, if my cousin or someone in US citizen (non relative) gifts me large sum, I am allowed to receive them (without Limit) but needs to pay tax as it would included in my overall income. Where is the question of money laundering here?
You would need to prove genuineness. Why a non-relative would give gift to you and not his/her family/close relative. Also, his networth/income. Income tax may inquire. The question of money laundering come when you have unaccounted income/cash that you give him and he would give you gift. Also, when you receive gift of Rs. 51,000, whole 51,000 is included as income and not just 1,000. Thanks.
what i understand is that Indian resident can not do forex in overseas currency (EUR/USD, GBP/USD). but some people saying that NRI can do forex. is it true? from online i have found that if someone don’t stay in India for 180 days he will be NRI. so isn’t like people can take 180days vacation in Bangladesh or Pakistan and become NRI? assume someone started overseas currency trade and after 5~10 years he want to withdraw the money. so last year of withdraw, he can stay outside of India to become NRI.
now is NRI status permanently or if he lives in india for 6 month+ for an year in future his NRI will be canceled?
=============
here i got another suggestion. if i make money from online in USD or other currency than INR and use that foreign currency to trade it will consider as legal. is it true?
in that case how can i fill tax return, how can i proof that invested currency was in USD. assume someone invested 100USD and make 50K USD or more after 20~30 years.
You have to be very careful for the definition of residential status. It is not that easy. For Indian resident on visit outside India, the person is resident even if he stays 60 days in India as per income tax. However, it is not important as the foreign investments are governed by FEMA. Under FEMA, if your intention is not of moving out of India, you will still be a resident of India under FEMA and all related rules will apply. I would suggest you contact your CA. Thanks.
Greetings Jigar,
Please let me know can i play online australian lottery from india with payments made via credit card ?
As iam currently in Delhi so would I be able to play online australian from my PC with credit card ?
please let me know.
thanks and regards
Mahesh
Remitting money outside India for gambling or lottery is prohibited and not allowed under FEMA. Thanks.
Hello,
Great article and very informative site. I have a situation and would appreciate if you can help please:
I am an Indian resident. suppose my friend playing European lottery on my behalf & hit big jackpot. Now I want to go that country on tour visa for 6/12 months to receive the amount. Can I open foreign bank account after reaching European countries? And how can I send the money to my Indian bank account? can I open NRE account in India? I will be ready to pay the tax also..
Please advise…. Thanks.
the visitor visa is max for 6 months. Also, as you have lived in India your entire life until now, even if your stay in India is 60 days, you are considered a resident of India for tax purpose. As a resident, you would need to pay tax on your global income in India. Also, if you argue that lottery winning is by your friend, transfer of money from your friend to you would be considered as a gift from non-relative and would be included in your income and you would have to pay tax on the same.
I would suggest you to be very cautious at it has all the red flags going up for the perfect case of money laundering.
Respected Sir,
My son is unemployed, and without investing any Indian / Foreign currency he is earning in Indian currency through foreign country (they provide us in Indian currency after converting USD) by providing FOREX services.
I want to know that whether it is taxable or non-taxable. Kindly suggest me.
Regards
P.K.Singh
I am not clear about your son’s situation or your question. If your son is an NRI, any income outside India is exempt. If your son is a resident, his global income is taxable in India. And, if he is unemployed and earning without any investment, I would be very cautious. Thanks.
Hi,
I am an Indian resident. I want to trade using the euro/usd currency pair. Is it legal? If not, how can I do this?
Thanks,
Vinod
It is illegal trade in ERU/USD pair. I would not recommend you for the same. Also, why would you want to do anything that is not legal? Thanks.
Hi Jigar,
I am living in the US for more than 3 years now working on H1B visa. I saw the rules on many of these big lottery websites(Powerball & MegaMillions) and see that it is completely legal for foreign nationals to play and win the jackpots.
Now my question is if I win the jackpot, say approx. $100 Million.
1. Will I be able to transfer the same to India after paying all the taxes in US?
Should I pay the gift tax of 40%(after federal/state taxes) to be able to transfer to India?
2. What are the taxes if any I would have to pay in India if the answer to the first one is YES?
Thanks – Suhas Gowda
Indian residents are not allowed to remit (transfer) funds out of India for playing lottery. As you are an NRI, rules are different. You are allowed to buy and play the lottery and also win and transfer the funds to India. If you win big, please contact us and we can help you with the transfer and taxation. Please note, there is no double taxation. Thanks.
Dear sir,
I am an ordinary resident of India and I have played online betting outside India and won some rupees in that currency but now I want to remit the won amount into my Indian account so is there any legal issues or tax implication or FEMA violation to withdraw that amount in India.
Plz suggest me
Remitting money for betting or lottery is not allowed as per RBI. Thanks.
Hi,
I am a Indian citizen on H1B and residing in the united states. I have saved up $50,000 and would like to send the money to India for both my parents. They will have it as a fixed deposit in their account. Is this money considered as a gift for them and is $14000/person limit applies here in this scenario as well?
Yes. It would be a gift (if you do not intend to get money bank in future)
Yes, limit of $14000 will apply. However, if you are married, both of you will be able to gift $28000 to your father and $28000 to your mother per year i.e. before December 2015 and in 2016. Thanks.
I have read your blogs, and would like to know the address of your Delhi or Gurgaon office to avail your services.
We are based in Ahmedabad, India but provide service to clients located anywhere in India and anywhere in the world. If you need our service, please contact us using the information in the “Contact Us” page of the blog. Thanks.
I have two question to Dear Jigar and I would be thankful for his guidance:
My son who has been in USA past over ten years was stationed in Washington DC and had bought a house in one of the suburb. Since he is transferred to west , California, he has sole his house and contemplating to buy one there but finding houses available are far more expensive ( amounting to double of that he had and has now sold ). This has created problem to purchasing of a suitable house even in suburb.
My question are the following:
1. He had purchased an apartment in India paying it in dollar. To ease out the present
situation, he is toying with the idea to sell it. Can the sell proceed be repatriated to
extent of amount invested plus any value appreciation of the property.
2. As a father, I would like to butt in to help him out to the extent of limit to tide over the situation so that EMI is on a comfortable level. If the answer is yes, what can be the limit ?
I would be thankful for your guidance.
Regards,
Tarun Kanungo.
1. Yes. He can sell the house in India and after payment of tax, he can remit funds to USA.
2. As a father you are allowed to gift upto $250,000 per year to him. Your wife can also gift the same amount to him. Please transfer funds directly into his US account. If you transfer to his Indian NRO account, he may need CA certificate in form 15CB and have to file 15CA for the transfer, unnecessarily complicating and delaying the transfer. Thanks.
sir i want to do forex trading but it is illegal in India so i want to trade it legally by paying tax to government so i want to know which country is best for me for choose will give me visa for it
If it is illegal, don’t do it. There are many products that you can do and make money. Thanks.
my friend a resident indian has invested in shares and mutual funds in uk and usa through an investment bank for few years now. On redemption he has paid taxes on them in India. He wants to transfer the balance lying in his account to India. Question is, as a result of fluctuation in dollar and pound vis a vis indian rupee, there is a surplus. will he be subjected to Indian income tax ?
thanks.
bala
Any income is subject to tax in India for Ordinary resident. Also, when you say he has reported foreign income in India, it would in in INR only. As he transferred in INR, and he would redeem in INR, the difference would be his income to be calculated in INR only. Thanks.
Dear Jigar,
Can An NRI trade in Forex outside India…?
and If i am working for a broker outside India, who deals in forex trading, my salary, commissions and other incentives, will it attract any FEMA violations charges..?
pls. suggest.
Thanks
NRI can do whatever outside India as long as the country he is resident in allows him to do. Thanks.
NRI has visited India during 30 days leave ( he is presently employed in Gulf) . He want to open online Forex Trading Account with FXCM(UK) and remit the money through bank wire as trading deposit. Can he remit it through NRE Account maintained with Dena Bank, Mumbai by bank wire and what reason he has to mention in the declaration with bank.
An NRI can remit the funds out of NRE account without any restrictions. I don’t think there will be any question for the transfer. Thanks.
Dear Sir,
He is an Indian Citizen, currently residing in the Saudi and working there for over 11 months now. I have the following question.
He won a lottery 2 millions. Can he then transfer whole lottery winnings to his NRE account in India ? Is there a limit to send? Is it taxable implication for FY 2015-2016? and he will be resident of india FY 2016-2017 so is it taxable for 2 million for 2015 transfer?
I read as per FEMA Act – it is prohibited and penalty will be thrice the amount transferred!
Grateful if you can respond to the query ?
Regards,
Kolabuttu
If he is an NRI for income tax and FEMA, there is no tax on foreign income and he is allowed to transfer the money to NRE account. If the bank or income tax department asks for the source, he should be able to prove the same. Once he become a resident, his global income would be taxable. So while $2 million won’t be taxable, any income on $2 million will be taxable.
You will have to be very careful as with the new Black Money Act, the income tax department and FEMA both are keeping an eye on the money transfer and sudden increase in easy foreign income of NRIs. However, if it is genuine and you have all the proof, you would be okay. Thanks.
Hello Sir,
Please explain your reply note “Once he become a resident, his global income would be taxable. So while $2 million won’t be taxable, any income on $2 million will be taxable.”
So – what I understood is that, There is no tax on $2 million any part of time but from $2 million whatever income arises such as bank interest or other investment profit would be taxable. is it right?
Many Thanks.
Yes. $2 million earned outside India as NRI, not taxable in India. But any income from $2 million earned while resident in India is taxable in India. Thanks.
hello sir,
first of all thanks for your valuable inputs on questions regarding forex trading its great source of information
well i’m residing in india , but after one month i’ll setup business in dubai
my question is
as i’ll open nri account in abc bank in india can i directly transfer my earnings of forex trading from my broker account to nri bank account, also how much can i transfer ?
eagerly waiting for reply thank you
Your business set up won’t make you and NRI. you would have to physically out of India. Once you are an NRI and resident of another country, you are required to invest based on the rules of that county. If you are an Indian resident and controlling business in Dubai, its income will be taxed in India.
As far as Indian laws are concerned, if you are an NRI, foreign income is not taxable in India. Thanks.
thank you sir
and yes i’ll stay in dubai for more than six month
Dear sir. He is NRI. is there any limit to send TT to NRO or NRE A/C through money exchange house.How much can be send for a year maximum? How much FEMA Act applies to this? Many Thanks
There is no limit on money coming in to India. It is better to send big money through wire transfer from a foreign bank and pay $40-50 for international wire and then negotiate with the receiving bank for better exchange rate. Usually, you would be able to get about 40-50 paise better rate than the card / official rate. Thanks.
Hello Sir,
Your blog is very useful to number of people. I have a simple question.
He is NRI and working in a company “X” abroad (outside india) more than 4 years now. Every year he will visit india for maximum 34days stay and return back. He is planning to stay in india permanently by this trip on JAN 22, 2016.
Residing outside India period:-
FY 01 Apr 2011-FY 31 Mar 2012 = 34days
FY 01 Apr 2012-FY 31 Mar 2013 = 28days
FY 01 Apr 2013-FY 31 Mar 2014 = 32days
FY 01 Apr 2014-FY 31 Mar 2015 = 34days
FY 01 Apr 2015-FY 31 Mar 2016 = 68days
Is there any tax will have to pay for FY 01 Apr 2015 – FY 31 Mar 2016 because his stay in india exceeds 60 days will be treated as RESIDENT or 183 days will be treated as RESIDENT?
Please note after 22 JAN 2016, he dont have intention to go abroad for work or any other purposes, Happy to stay in India.
Appreciated for your earlier reply.
Thank You.
Apologies Small Change
Residing outside India period:-
FY 01 Apr 2011-FY 31 Mar 2012 = 34days stay only in india
FY 01 Apr 2012-FY 31 Mar 2013 = 28days stay only in india
FY 01 Apr 2013-FY 31 Mar 2014 = 32days stay only in india
FY 01 Apr 2014-FY 31 Mar 2015 = 34days stay only in india
FY 01 Apr 2015-FY 31 Mar 2016 = 68days stay only in india
Approximately every year more than 300 days stay outside india
As you are an Indian citizen, if you stay in India for 60+ days, you would be a resident. However, as you have stayed less than 365 days in last 4 years, the status would be Not Ordinary Resident. As a Not Ordinary resident, your foreign salary income won’t be taxable in India. If you don’t want to get into complexity, take an international vacation of about 10 days and return to India after February 2, 2016. Thanks.
Dear Sir,
You’re doing a great job by providing free consultancy on the internet.
I’m an Indian resident.
I too have some doubts and questions :
1. In my free time I work for few online PTC/PTS sites and earned dollars which are less than USD10,000, Can i withdraw this money to my saving account via payment processors like Paypal/Payza?
2. Recently I saw many Indians residents were actively participating in US based online HYIP programme and earning money, still my query is same, can I invest some dollars (via payment processors) in it and withdraw it to my bank account in India? It is legal?
Waiting for your reply,
Thanks.
1. Any income even $1 needs to be included in your income tax return. You may withdraw/transfer funds to India.
2. US based HYIP program may be a ponzy scheme where you may not see any return. You have to be very careful in investing such programs. As per FEMA, you are allowed to invest outside India. You need to really understand the HYIP program that you want to invest in. HYIP is a grey area as if it is used for borrow/lending, it may not be allowed. Please check with your CA. Personal suggestion, Don’t do it. Thanks.
Hello Sir,
I am confused, please give me a scenario. What is FEMA Foreign Exchange Management Act means, is it applies only those who send money from india to abroad or what really it is!
Many Thanks.
FEMA applies to all foreign exchange related or international transactions to residents and all transactions of NRIs in India or with residents. Thanks.
Dear Sir,
How much tax should be paid for selling house approximate value 50 Lakhs rupees?
Thank You.
Amount of tax would depend on the cost of property and whether it results in a short term or long term (3 years+) capital gain. Long term capital gain is taxed at 20.6% and short term at regular rates – TDS of 30.9% will apply. Thanks.
Dear Sir,
I’m planning to open a forex trading account with a broker in US. Can I use my Indian savings account to transfer the fund to broker and back from broker.
I am NRI, just I want to check the possibility of using my Savings account in India.
Thanks
As you are an NRI, you can do forex trading. However, you first would need to re-designate your resident account as NRO and then transfer to NRE and to USA or directly from NRO after certain formalities. Thanks.
Dear Jigarbhai..
Thanks for blog..
I want to deposite 1000 us dollar in forex in other country from india..or from my friend in uk …
I will trade from india remotly..
After some time .. how can I get my profit back to india?
Suggest.. me for possible way.. I m ready to pay tax to my country…
Shailesh
As you are an Indian resident, you can only trade in the activities or instruments as allowed by the RBI outside India. As per Income tax, you are required to report all your global income. If not, it may be considered and covered under the Black Money act. My suggestion, do whatever is allowed and pay tax. Thanks.
Hi,
I am an NRI currently. Due to growing economic condition in India, some friends of mine asked me to invest their money and made a pool of appr $60000 for said purpose. They deposited their money in my overseas bank account. As I am on dependent visa, the banks does not allow me wire transfer without my tax clearance certificate. But, they provided me international debit card. So, when I was on vacation in India, I withdraw money from my overseas bank account and invested in India. Now, I am returning back to India. Is there any complications I have to face regarding taxes in India as resident? Can income tax department query me for source of funds in my overseas bank account?
First be clear, are you an NRI or a resident. It will make things easier. Also, NRIs are allowed to invest freely. I am not sure why your friends would transfer the funds into your account. They can invest in their own name in India. If you have circumvent the laws, of course, you would get a query from Income tax in India and may also be from IRS. If you are on dependent visa, I would not recommend doing anything that unnecessarily increase the risk of being in the radar of the tax authorities in any country. Thanks.
Sir, I am an NRI for last 2 years
I would suggest you and your friend to invest in India directly in their respective names. If you need any help with the same, please contact us. Thanks.
Dear Sir,
I am in the midst of disposing my property in India. The buyer is an Indian resident. The property was initially purchased by myself through an NRE housing Loan.
Iis there a process by which i can deposit my principal in NRE account and the capital gains in NRO. How will the bank accept a rupee cheque for an NRE Account? What are the documents the bank will require?
If it is a residential property, money paid out of NRE account may be credited back to NRE and only gain can be credited to NRO account. If the buyer deduct TDS, you may also transfer the funds from NRO to NRE after submitting CA certificate in Form 15CB and filing form 15CA online. In addition, bank may require copy of purchase deed, sale deed, proof of payment out of NRE account, etc. Thanks.
Hi
I am a Canadian citizen for the past 7 years now. I have money in my NRO account in India. The money in the NRO account was from salary earned in India, money my father saved in my name and sale of NSC certificates that were in my name.
Can I transfer any of this money to my bank in Canada? If so how much can I transfer?
Also, my brother and I have shares and I w
My apologies for pressing submit in error.
My brother and I have shares in India. All shares are in my brother’s name but my parents willed that we need to share the same 50/50
If I sell my half of the shares. Am i able to repatriate the money from the sale to Canada?
Thanks
As you are an NRI, you are allowed to transfer/remit equivalent of upto $1 million per year outside India from your savings or sale of assets. Please consult your CA. I would think, you would need a CA certificate in form 15CB and also need to file form 15CA to the income tax department for the same. Thanks.
I have opened an account with http://www.svsfx.com/ and started Forex trading (in currencies other than INR) and this is a registered company at UK.
Money was transferred in INR using PayUmoney as per the 1000$ conversion rate and the current trading platform is in US dollars.
1. Would you be able to check and confirm if this is fine when I take my profits back to my Indian bank accounts?
2. From tax and RBI’s point of view, is this legal? I see there are lot of Forex advisory firms and also lot of people already doing Forex trading. So correct and accurate information regarding this would be very nice.
Forex trading by NRI outside India in currencies other than INR is not allowed by RBI. If you have just checked RBI website or googled the question, you would have known. Thanks.
It related to Jumana Query Dt 05.09.2015 & your reply Dt.12.09.2015. In reply to other queries you had clarified that there is no restrictions of RBI for International Forex Trading by NRI , but in said reply to Jumana you mentioned that forex trading by NRI outside India in currencies other than INR is not allowed by RBI. Please clarify.
The restriction is on RESIDENTS for forex trading outside India. RBI does not regulate NRI’s activities outside India. NRI is to comply with the laws of countries where he is a resident. Thanks.
I am Gulf NRI doing forex trading with a cyprus broker. Can i transfer my profits from forex account to my NRE account in India directly. Further, after i return back to india and become and resident, can i continue doing forex trade and transfer the profits to india. (there will be no outward remittance only inward profit remittances into india)
1. Yes, you can transfer your foreign income to NRE account.
2. Once you are a resident, you are not allowed to keep NRE account and not allowed to trade in forex outside India. Thanks.
Please reply the below query:
Indian citizen went to USA and took education loan from bank in USA.
Now he is back to India and Resident in India.
His Father wants to repay his balance of education loan.
Q1. can his father repay directly to the bank? OR
Q2. He still has a bank account in USA, so can his father transfer funds to his US account and then he will repay the loan using transferred funds.
Q3, whether 15CB required for both of the above options?
Please check with the bank where you have account and understand procedures and complications for both options. I would think 15CB/15CA may be required but check with the bank. I would think it would be easier if his father gift him and credit is account in USA and then he repay the loan. Thanks.
This is a great post!
I’m also hoping to get an answer to my specific situation.I am an NRI (for India) and US Resident (Green card holder) currently residing in USA, I received some money ($15,000 USD) from India from a ‘non-relative’ through wire transfer directly in my USA saving account. Money was actually return of a loan I gave him two years back.
My questions are –
1) do I need to pay GIFT tax in USA since I’m receiver?
2) Does sender (Ordinary Resident in India) need to pay any tax on the money he sent to me?
thanks a lot for your time
Kamal
1. As per FEMA, an Indian resident is not allowed to remit funds outside India as a gift to non-relative. I am not sure how you got the funds as the bank would not transfer the funds.
2. Any foreign gift is not taxable for US residents. You just need to report the gift received to IRS.
3. There is no gift tax on the sender. Gift amount is taxable for receiver in India.
4. You need to determine the nature of transfer. I am not sure whether you are considering the transfer a gift or a loan. The RBI rules and regulations are different for gift and loan. Thanks.
Hi Sir,
Thank you very much for your prompt reply and it is benefiting lot of people providing wealth of Knowledge and your effort really appreciated. I have simple question.
Example: If an NRI returning after 5 Years or 7 years or 10 years?
Is there Tax Implications when an NRI permanently returns to india. Which are all the best practices can be made to avoid Tax Implications?
The taxability is determined by the residencial status of the person. Care should be taken to use the maximum benefit available under FEMA and Income Tax act and accordingly plan the return, assets and investments. Thanks.
Dear Sir,
I left india on 29-Mar-2014. I am working in UK since 03-APR-2014 and will be returning to India on 18-SEP-2015. I have sent all my income to NRE account yesterday.
Is there any tax needs to be paid for financial year 2015-2016 because my stay of india will be from 18-SEP-2015, i dont have the plan to go outside india for holiday trip or anything.
Note: 18-sep-2015 to 31-mar-2016 = so the stay will be 194days
please advise. Thank You.
I would think you would be resident as your stay in India would be more than 60 days and you have already stayed in India for more than 365 days in 4 preceding years (2011-12 to 2014-15). Thanks.
Thank your swift reply sir, So do i need to pay tax for that amount which was transferred.
Transfer of amount is not taxable. The income that you earned outside India would be taxable. Also, you would be able to claim credit of any tax you paid outside India. Thanks.
Hello sir,
Your blog are useful. I have a question.
“He/She in India for at least 280 days during the 5 years preceding that financial year and in India for more than 60 days during that financial year.
Is HE/SHE resident or non resident?
I would say non-resident provided the stay in the financial year is less than 182 days. Thanks.
Hello.
what is residential status? If number of days stay in India in the Previous 5 Financial Years (PFY)
PFY1 180
PFY2 50
PFY3 60
PFY4 60
PFY5 180
Thank You
Number of days you have lived during the year is also important. Thanks
Well. I am an Indian resident. My real brother is staying in USA for last 20 years and is a green card holder, well settled.
If I win a international jackpot from India like powerball USA, can’t I open an account in USA, and transfer amount to my brother bank. He can send me money as a gift every year as per limit, shall it be still prohibited.
Please clarify.
You are not allowed to transfer money for lottery outside India i.e. you can not buy ticket to powerball. So legally, you can not win the lottery. Anyway, the gift received from your brother is exempt from tax in India. However, your brother may have to pay gift tax or report to IRS if the gift is more than $14,000. Thanks.
sir,i m resident indian through overseas equity market like nasdaq which is not prohibited as per rbi . i earn few dollars i want to withdrawal my money should i need to pay tax to india? if suppose i need to paid means pls give how much % i need to pay to ind govt.
Yes, as the securities are not subject to STT, you would pay tax based on long term (20% after indexation) or short term capital gain (normal income). Thanks.
Hello Sir,
I want to know I have opened an account with forex broker having leverage or margin of 200.But I am trading only in foreign index like dow Jones, eustx500 , and in commodity like gold, silver. Can I transfer profit into my bank account in India
As an Indian resident, you are not allowed to trade in forex. I would recommend trading in securities allowed by RBI/FEMA or in Indian exchanges. Thanks.
Dear Jigar,
Greetings.
I am an Indian resident now travelled abroad many times. If i win the Dubai Duty Free Millennium Millionaire raffle (1 million Dollars), how can I deposit into my Indian resident savings account.
Best Regards,
Zen
Unfortunately, there is no easy answer as you are not allowed to remit funds for gambling or lottery. However, you are allowed to take foreign exchange for travel. You may buy a raffle. As a result, I would suggest you to get approval from RBI in case you win the $1 million raffle. Thanks.
Thanks Jigar. I will get in touch with you in the fortunate event for an answer and process to get RBI approval.
My compliments to you sir, on a very practical and useful forum. My daughter in law Prabha works with TCS as a project manager and is posted to their US office. She has been staying in US for past 4 years and is likely to continue there for next 4 years . She and her husband are both N R I. She has her US bank account. In the Co operative Society building that we are now staying In Mumbai there is one flat for sale ( area of 600 sq ft at rate of Rs 15,000/ per sq ft ) . It is owned by a US citizen ( originally an Indian from Mumbai but now permanently staying in US a medical doctor by profession.. The cost of the flat is 90 lacs Indian currency. The two families are known to each other and have mutual confidence in each other. She is interested in buying this flat in our Society in Mumbai. She has a saving of (1) Indian Currency of Rs 15 lacs (2) US dollars of 40,000/- in her US bank now. The total price of the Flat if converted to US dollars will be about 110,000 US dollars. She is willing to pay stamp duty and register the document ( the seller has given power of attorney to her fathers brother living in Mumbai. )
My question is
(1) can she make the payment of the flat in US dollars from her bank account in US directly to the sellers bank account in US.
(2) Can she make the sale agreement (if both parties are agreeable ) that the balance of the payment of US $ 60,000 is paid to the party in monthly installments of US$ 2000 per month for next 30 months so that the whole transaction is directly paid to the seller in the US in US$.
(3) Instead of registering the sale deed in Mumbai can the sale deed be notarised and registered in the US in the city where the seller is staying.
(4) as a guarantee for the payment of the entire balance she is prepared to deposit the entire set of documents with the seller custody till the entire payment is completed.
(5)By this process both parties will save going to a bank for home loan from the bank and getting involved in the red tape and questions.
(6) They will both save the transfer charges for converting the US $ to Indian Rupees and again back from Indian Rupees to US$. and all incidental bank charges and bank commissions.
Both the parties know each other and have mutual faith and confidence but still the paper work is necessary to be done properly.
If registered in Mumbai the stamp duty and registration will be done here.
I would be grateful if you would give your valuable opinion and advise.
Thank you
Dr. V..Kamath
13th October 2015.
The mode of payment for an NRI buying an immovable property in India are inward remittance or transfer from NRO, NRE or FCNR account. Any other mode of payment including Traveller’s Cheques or foreign currency note or direct transfer outof India is not allowed. If property is bought, it would be considered as buying of property in contravention of FEMA laws and NRI won’t be able to repatriate the funds outside India. Thanks.
26 Oct 2015
Thanks for your expert advise.
1. The seller is a PIO but now a US citizen and if the payment is all made in US $ there is no question of repatriation of funds.
2. The buyer is an NRI and will be in US for next 3 years and during this time she will pay the entire sale value to seller in US $. She will return to India after 3 years and wants to live in the flat in India. So there is no question of selling and repatriation of funds at all. Even if she sells later on she will be happy to receive the sale value in Indian rupees.
3, The purpose or motive is not to cheat the Government but to avoid unnecessary paper work in transferring money in both ways by both parties.
Based on this please suggest the best way out.
Thanks
Kamath
26th October 2015.
Money has to be paid via inward transfer or from NRO/NRE or FCNR account. Any other mode of payment (in US$ outside India) is not allowed. Paperwork is required to ensure compliance with laws and regulations. Thanks.
Thank you for correct advise.
Kamath
26 October 2015
Hello Mr Jigar
I am being a NRI student living in France wants to repay my education loan granted to me by my French University. Kindly let me know the annual limit for outward remittance under FEMA for education purposes for a NRI.
Thanks
As an NRI, your overall limit is $1 million per year. Thanks.
Sir,
I want to open & deposit with forex broker. Trading will be thru EA software program on automode & will be not from India but will be on VPS server of other country.I will deposit $200 as initial deposit. So profits from this i will transfer to my indian bank account. Is this allowed & on profit portion i will pay tax. (This is forex & not binary trading)
Pl give yr opinion.
A resident is not allowed to trade in forex outside India. It is not allowed so Don’t do it. Thanks.
NRI person “X” is in India. Is it allowed to transfer money to “X” NRE account by his friend “Y” who is residing outside india. is there any limit on it?
I would suggest Y to transfer X’s foreign account outside India and then transfer to his NRE account. In India, any gift from non-relative is taxable and included in income. Thanks.
I am indian resident .I Have account in iFOREX.
Is forex trading is legal in india
Regards
Forex trading outside India of currency paid not involving INR is not legal. You may trade in forex as a hedge (for import or export) and not as speculation. Thanks.
Hi Jigar,
This blog of yours is a wonderful source of info and its an amazing effort on your part to advice visitors with their diverse tax queries.
I am an NRI based in UAE and while discussing various USD investment options with a few freinds got to know about Nifty options trading. I was exploring various options. can you please answer my following queries.
1. 1st is trading in nifty options through an Indian broker but thats allowed only through a NRO account on non repatriable basis. How is the taxability on this for a NRI. is this income taxable and do I need to file returns
2. 2nd is trading through an international broker on Singapore SGX nifty options by investing in US dollars funded through my overseas earning USD bank account. How is taxability in this case for a NRI? is the income through SGX nifty options trading taxable in India. is there a TDS involved in this or STG/LTG and do I need to file returns for same?
3. I also actively invest in Indian stocks and MFs on long term basis through NRE repatriable route and mostly sell my investments that qualify as LTG which I believe are not taxable. Do I need to file returns in this case as I have income from equities but its not taxable. I have FDs in my NRE account which are again not taxable. I do have small amount in my NRO account aprox 10-15,000 INR which generates some interest and some minor TDS is deducted for that. I have read on a lot of investment and tax blogs that its not mandatory for a NRI to file returns unless his taxable income in India does not exceed INR 2,50,000. Can you please confirm this?
Thanks,
Peeyush
1. Taxability is same as any resident. No special tax provisions for NRIs.
2. It would be considered foreign income by NRIs outside India, not taxable in India.
3. While it is not mandatory, I would recommend as you intend to invest or trade in securities in India. Income Tax department gets all the information so better to file tax return. Thanks.
Hi Jigar,
Thanks for those answers.
on point number three
1.Even if I do not have taxable income above 250,000 you suggest I should file tax returns? If I have taxable income below that limit what should I show in the returns?
2.In those returns do I need to show the LTG and dividend income from MF/equities which are not taxable?
3. I had read we need to pay advance tax in 3 stages. how do we decide how much to pay? when we do not know the income or if I am not sure if I will sell any of the MF/equities in a financial year as mostly I keep them for long term may be 2-3 yrs.
4. Till now my income has always been LTG and I have not done any short term trading but now am exploring the nifty options trades. how will i decide about advance tax and returns in these case?
Thanks again and best Regards,
Peeyush
1. You may file the return even if the income is less than 250,000.
2. Yes, they will be included as exempt income in the tax return.
3. If advance tax is not paid, you would just pay the interest. Adv. tax is applicable only if tax payable is more than Rs. 10,000 i.e. about Rs. 5,00,000 (basic exemption 150,000+investments 150,000+97000 taxable income taxed @ 10.3%).
4. F&O trading is risky so I would recommend not paying advance tax as there could be gain until Feb and then loss in March reducing tax. Thanks.
Hello Sir,
NRI lost his status and I read – Worldly income is taxable in India means what? please explain?
Suppose NRI sent all money to his NRE account, for instance say $50 Million once he lost NRI status, is he need to pay tax for $50 Million or Income arises from $50 Million taxable?
Which one is correct?
Thank You.
Income from $50 million. Thanks.
Hello Sir, It will be a moment in everyone’s life when we have decided to come back and settle in India after spending
considerable years abroad. If we stay in India beyond 180 days you would be considered ‘resident’ for Income tax purpose. My Question is, NRI returning to India on April of any FY after stayed in abroad for 6 years and his earlier stay in india less 300 days. Is he pay tax on last FY the money sent from abroad itself?
Thank You.
Money sent from abroad of tax paid income earned outside India is not taxable. However, any income e.g. interest on the money sent would be taxable in India. Thanks.
Hi Jigar,
I have around Rs 20 Lakhs in my ICICI Bank India Account from selling a house (immovable property). If I repatriate this amount to my US bank account, will this be taxable in the US and if yes, at what percentage?
Tax is on income. So if your sale of property resulted in capital gain, you would pay the tax. The tax rate is different if the property is long term or short term. Only after payment of tax and CA certificate, you would allowed to remit funds to USA. You would also need to disclose the capital gain in your US return and pay tax accordingly. However, you would be allowed to tax the tax paid in India as foreign tax credit under DTAA – double tax avoidance agreement between India and USA. Thanks.
Dear Mr.Jigar,
I will appreciate if you kindly answer my questions
1 If any Indian national residing in Nepal for very long time can open NRE account in India and can remit amount from Nepal can be deposited in his NRE account held in India?
2 if any Indian resident wish to send amount abroad under LRS it is mandatory to fill 15CA 15CB
Is there any option whereby Indian resident can make outward remittance without filling 15CA 15CB
3 What is the limit of BTQ (basic travel Quota) and it is necessary to file 15CA 15CB n this regard.
Thanking You
Vyomesh shah
1. Yes provided money remitted in foreign exchange.
2. From Finance Act 2015, 15CB/15CA would be required for any payment to NRI, including NRO to NRE transfer.
3. I don’t think 15CB/15CA required for travel under BTQ. Please contact your travel agent. Thanks.
Hello,
My friend was an NRI in Gulf for more then 12 years where he was working for a MNC’s Whatever money he earned in Gulf was invested in a residential property in Gulf. Now he is a resident Indian and he sold his property in Gulf and he wanted to bring back the money what he earned from selling the property in Gulf to his Indian bank account. He is resident Indian for the last 4 to 5 years. He wanted to buy the property in India for that money he earned from selling his Gulf property. The Gulf property was on a mortatage. Please suggest is he has to pay tax in India since he is buying a property in India to leave. Also he was away from India for more then 12 years. For vacation he used to visit not more then for 30 days is a one year.
As he has been an Indian resident since last 4-5 years, he would be considered as an Ordinary Resident of India and would be required to report the sale of property and pay tax on the same in India. However, I would think that if he buys a property in India, he may be allowed the deduction. There is no restrictions on location of property being sold. The requirement is that the new property is located in India. Please consult your CA. Thanks.
Dear Mr.Jigar Patel
Thanks a lot for replying my question all praise to you
I have purchased my house from my NRI funds i.e payment has been made from my NRE account. If I wish to rent my house It may fetch RS25000.00 per month in this case what shall be the tax liability? will my tenant deduct the tax and how can I claim it back and what shall be percentage of tax? How can I file incometax return while I am staying abroad
Thanking you
Sincerely yours
vyomesh shah
As you are an NRI, tenant is required to deduct TDS @ 30.9% on the rent amount. Also, you need to report the income in your income tax return and ask for refund. The IT return can be filed online or you may ask your CA to file on your behalf. If you don’t have one, please contact us for the same. Thanks.
Dear Mr.Jigar,
How many residential and commercial property in India NRI can buy from the payment from his NRE account.
Are there two types of PAN CARD from I.T. department one for NRI and another for resident Indian.
Thanks
Vyomesh Shah
1. Only one PAN card. If your residential status is changed from resident to NRI or vice versa, you are required to update the information in the PAN card accordingly.
2. You can purchase any number of residential/commercial properties from NRE account. There is no restrictions on acquisition. However, there is a restrictions on crediting proceeds directly to the NRE account on sale of residential properties. Only sale proceeds of 2 residential properties per person can be directly credited to NRE account (upto the cost of purchase). Any gain and/or sale of residential properties of 3rd and other residential properties can be credited to the NRO account. Thanks.
Dear Mr. Jigar,
Sorry to bother you,
My query is
1 I am non resident Indian whereas my wife is resident Indian residing in India
I send money from abroad to my wife/father/sister in India is there any limit to it? and will they have to pay any tax in India from the remittance send from abroad.
2 We have purchased house in India (from the funds of my NRE a/c) which is in the joint name i.e in my name and in the name of my wife as well if I happen to rent that house and income generated in form of rent whose income will it be considered? and what shall be the tax liability will there be any TDS
Thanking you
1. Any gift received by residents from NRI close relative is not taxable in India.
2. While property is in joint name, anyone who paid money is said to own the property. As you paid the property from NRE funds, you are considered as the owner of the property. So any rent income would be included in your tax return. As you are an NRI, TDS @ 30.9% will be applicable. Thanks.
Dear Mr.Patel,
I would be thankful if you answer my query
1 I am renting an apartment whose owner is NRI he insists that tenant has to deduct TDS at the rate of 30.9% is it true and if so what is the procedure to deposit that amount
Thanks
Yes. Rent payment to NRI is to be deducted @ 30.9%. You would need to obtain the TAN, deduct tax, pay net amount to owner, pay TDS to government, file TDS return, issue TDS certificate for every payment you make. I would suggest you to contact your CA. Thanks.
How to bring lottery money from usa to india…I read that lottery is illegal in india..and as a penalty u have to pay 3 times more money…so what are the possible way to bring money India legally
If NRI won lottery, it is okay. Complexity arises it a resident wins the lottery. It is being used by many as money laundering but if won by resident, he would need to pay tax as well as global income is taxable for residents. Thanks.
If Indian residents win USA lottery….and he is not NRI then……in your blog u also wrote that it is illegal…..some of site tell that it is black money…so possible ways to bring money which means it not consider as black money…what’s is the complexity arise…any permission required from rbi…
A resident is not allowed to remit money for playing lottery as per RBI laws. If you can not buy / play, you can not win so winning would not be allowed too. Any money from transaction not allowed is considered as black money. I suggest you contact RBI for more clarification. Thanks.
Hi i am from Tamilnadu. Is Binary option trading is legal in india. how can i invest and withdraw the profit amount to my bank. or please guide me the legal way to binary option trading.
Thanks.
Any option that are traded in exchanges in India are legal. A resident is not allowed to trade in forex options. Thanks.
Thankyou for ur reply sir, being a basic/pro/etc etc i dont understand ur reply (Any option that are traded in exchanges in India are legal).
I meant to say that if you can trade (buy/sell) an option on any recognized exchange (BSE/NSE/MCX, etc.) in India, it is allowed. However, a resident is not allowed to trade in forex. Sorry for the confusing language. Thanks.
Dear Jigar
From January 01,2016 government of India has made mandatory to provide pan card for the purchase of Rs 50,000+ does it apply to NRI as well.?
Thanking you
Any rule that apply to resident for quoting PAN would also apply to NRIs. However, I do not think PAN is required for ANY purchase of Rs. 50,000+. Thanks.
Hello Sir,
Currently, I am working in USA on H1B visa. I came to US in JAN 2015. So for income tax purpose, I am Non-Resident Indian for financial year 2015-16. I have query regarding lottery winnings outside India. After reading other Q/A in this blog, I understood that if NRI wins lottery in USA, the lottery winnings can be transferred to Indian Bank account legally. If I win lottery in April 2016 and permanently come back to India in Jun 2016, I think I will be considered Resident Indian for financial year 2016-17. In this case, will I be able to transfer lottery won in April 2016 to my Indian bank account? Will it be considered illegal? If yes, that means, I will have to stay in US at least for 183 days of FY 2016-17 to make this lottery winning legal. I can travel back after Aug 30, 2016. Please advise. Thank You!
As you are an NRI, you are allowed to play lottery as per Indian laws. Please check if you are allowed to play as per US laws. I think you are allowed as you are also an US resident. If you win, please contact us and we can help you with the transfer of funds to India and also invest to effectively to save your tax. Don’t think too much. All the best. Thanks.
I am an NRI working in Gulf and my wife stays with me .I intend to gift her an amount of USD 150,000 which she wants to use to trade in F&O category in Indian Stock Market.
Is it allowed under FEMA/Income tax rules.
Is there a gift tax applicable
Can the funds be repatriated back incase required by me in future.
Kind regards
Broy
1. As you are an NRI, you need to follow the laws of country where you are resident. FEMA applies to Indian residents and NRIs for their activities in India. FEMA does not apply to NRIs transacting with other NRIs. So any transfer to your wife needs to comply with the gulf country of your residence. Once funds are transferred to India, FEMA will apply.
2. As per FEMA and Income tax, the funds will be of you wife. Also, NRI are allowed to trade in Indian stock market only on delivery basis through PIS. The investment through derivaties (F&O) can only be done on non-repatriation basis from NRO account only. Thanks.
Can I take out 250000 rupees from my NRO account when I leave India after visiting?
Yes you may but you are not allowed to carry that much INR with you while you leave. Thanks.
Dear Sir,
I am doing some consultancy and has gone into an investor who has funds in Singapore for trading the funds by bank operated treasury programs and Bank is giving the benefits to the investor and investor is paying me commissions in my singapore account
1)What will be the tax if I bring my commissions in india?
2) I want to purchase with this commission a house and office in singapore whether I have to pay tax in india for this purchase of property.?
3) I am not NRI whether all the things is legal as per RBI norms?
Thanks in advance for your reply.
1. If you are an Indian resident, the fact that you have received income in Singapore, itself is subject to tax. Your bringing money to India is not taxable.
2. There is no tax on purchase of property. Tax is only on Income. However, as a resident, you would need to include your accounts/assets in Foreign Assets. If you don’t, it may be considered as Black money and subject to penal provisions.
3. As long as you report your income and pay tax on income received and report foreign assets to IT department, I think it is allowed. Thanks.
Hi,
Thanks for all the useful information you provided.
I am currently in US on h1-b status. My brother is planning to do his higher studies in india and he has got a seat under nri quoto. I m the sponsorer for his studies. But the fees is $75k per year for 3 years. This amount is huge and I cannot pay the college currently. My father has arranged for the money and he is planning to transfer that amount to my account. And the college will deduct from my account. I want to understand all the consequences involved in this process. Will I or my dad have any income tax issues? What is the maximum amount I can get from outside country to US? Thank you
1. Any transfer between two different person needs to be categorized; whether gift or loan and FEMA rules relating to that transfer category needs to be complied with. You also need to comply with the rules relating to foreign gift received and gift given of IRS.
2. Please note your parents can give gift to you of upto $250000 per year as per FEMA. As per IRS, foreign gifts are tax free provided declaration is made. Also, a US resident can give gift of upto $14000 per person per year without declaring to IRS. Any additional amount needs to be declared to IRS and whether gift tax is to be paid or a declaration to adjust it against the lifetime gift amount.
3. NRI can remit upto $1million per year outside India. $250,000 limit is for Indian residents. Thanks.
Hi
I was an NRI till 3 months ago. During my stay in overseas, I had opened a forex account and funded it with my salary that I earned. I have not transferred rupees outside of india. Could you please clarify if I can continue to operate the forex account after returning to India?
Thanks in advance
You can continue as long as your residential status is NRI. Residents are not allowed to trade in forex. Thanks.
Sir,
I am an Indian Resident and I am Professional Trader trading stocks & commodities in NSE & MCX. One of my NRI friend is trading in international
forex(EUR/USD , GBP/USD, USD/JPY) he offers me to trade behalf on me on his account whatever profit will share equally.So is it legal to manage international forex trading fund an Indian Resident and he told me that he will transfer profit amount to my bank account.Is it any legal issue to accept this deal??
An Indian resident is not allowed to trade in forex, directly in his/her name or indirectly in anyone else’s name. Also, any transfer from your friend to your account would be considered as taxable gift. I would not recommend. Thanks.
I want to purchase goods from Hong Kong and sell them in the USA. As an Indian resident, can I wire transfer USD to my supplier in Hong Kong?
Yes. Please contact your bank. However, you may need 15CB/15CA for the same. As per revised notification, no 15CB/15CA would be required for import payments but the notification is applicable from April 1, 2016. Thanks.
Can NRI continue to hold his overseas bank account after returning back to India and being a Resident Indian?
Yes. However, he would need to report the same as foreign assets and any income once his residential status is changed to Ordinary Resident. Thanks.
i am an indian resident but i want to trade with forign broker in stock,commodities not in forex can i trade ?
Yes. RBI allows investments outside India upto $250k per year. However, you will be liable to report your foreign assets in your tax return in India and pay tax on any income in your tax return. Thanks.
Hi,
I am currently out of country on business visa and my company gave me a prepaid forex card from hdfc bank. I am travelling back to India after few days. I have saved some amount, around 3000 USD and I want to transfer it to my salary account. I contacted hdfc bank and they said yes the amount can be transferred from my forex card to my salary account.
I would like to know, once the amount is creditted to my salary account, is it taxable? Do I need to pay any tax on those 3000 dollars?
Thanks.
I would think so. It would be perquisite not used. Please check if it is included in your pay summary. Thanks.
Hello,
I am employee in one of Indian company and in side business i earn some amount ~70k INR and it will be transferred by my Australian client in my saving account, so is that illegible or just have to do by any another way?
please suggest.
It is not illegal if you report your income to income tax department. Whether you are allowed to do that while on a full time job is between you and your employer. Thanks.
so far your blog suggest that India citizen is not allowed to trade in forex but what if someon on his/her vocation out side india can he trade in forex and option ?
Only if you are an NRI and the laws in your country of residence permits, you can trade in forex. Thanks.
Sir,
I had opened a trading account when i was pursuing a degree course in USA, with an US broker in an US bank account. The trading activities included stock trading in various exchanges and FOREX trading. Now I am back in India.
1] Can I continue trading in stocks in the exchanges of various countries, with the same account ?
2] Can I continue trading in Forex, while the money will only accumulate in the US bank account and never brought to India as I own a disregarded entity LLC in the US which requires me to make a couple of trips to the US in a year.
3] If not[FOREX], how can I sell the currencies which I have kept for long term, but want to sell right now[in India].
4] I want to continue trading in Forex, so [if not] can I open a new trading account in the US in the name of my LLC to make it lawful, as I will not be technically trading and my LLC will be.
5]Lastly, Since the broker is a US broker, and the income is generated in the US, Do I have to pay taxes here? or in the US? [ in 2 separate cases- personal trading, LLC trading]
your help is appreciated, thanks.
1. Yes.
2. I would not recommend.
3. You can close all your positions.
4. You would be the ultimate owner of the LLC and may need to report your income and transactions in India to IT department.
5. Yes, if you are an ORDINARY RESIDENT. Thanks.
Thank you Sir, for your prompt reply.
I understand that an Indian resident can not trade in forex. I am still confused about the third question,
Can I open a forex trading account in the name of my one person LLC in the US and forex-trade in its name while I am a resident Indian and pay full taxes on global income ! ( as I will not be actually trading and my LLC will be)
* the confusion persists as I am still the sole owner, but present in India.
Thank you.
I would not recommend as you are 100% owner. Thanks.
So do you recommend appointing a director/ shareholder, and converting into a traditional LLC. Director or shareholder ? Pls specify.
Yhank you.
If you are an Ordinary Resident of India and owner of a business outside India, as you control the business, you would need to pay tax in India. Thanks.
Sir,
I have ESOP shares that can be sold in US stock market through US etrade online. Please let me know how I can get the proceeds transferred to my Indian savings bank account. I am a resident Indian.
I would be allowed. However, you may need to report the assets as foreign assets and income in your IT return. If your residential status is NOT ORDINARY RESIDENT, you may not have to pay tax on the sale of shares as the income is accrued and received outside India. Thanks.
Hi,
I came back to India one year ago and am a resident indian citizen. I own a pte. Ltd in Singapore which solely deals with capital gains. According to the DTAA between India and Singapore, Do I have to pay taxes here in India , as my company already pays taxes in Singapore. I heard India and Singapore have a DTAA which doesn’t require a Singapore company to pay taxes in India if it pays taxes in Singapore.
Also capital gains taxes in Singapore are very less.
A. If you own a company in Singapore that solely deals with investments in India. I am not sure if this is allowed. A resident can not invest as an NRI and claim DTAA.
B. If your company invests in Singapore or any other countries except India, I think the company is a separate legal entity and you may not have to pay tax on it. However, if you receive any remuneration or interest or dividend on you individual capacity, you would need to pay tax in India. Also, if your Singapore company is a wholly owned subsidiary of your India based company, he would need to combine the income and take DTAA benefit. I suggest you contact your CA and get guidance. Thanks.
Can I LEGALLY trade in forex, if I relocate to Bhutan ?
Where will I be required to pay taxes then ?
[I am an Indian citizen]
I would think so but I would not advise just to trade in forex. I don’t think it is that much lucrative. You would be an NRI. Being an NRI from Bhutan, you may not be able to invest in other assets e.g. immovable property. Thanks.
I want to withdraw my money from forex accounts (forex and binary trading) opened some time back with foreign broker. I have not made any profit from forex trading. I only want to transfer those my own money deposited through my credit card to my savings bank in India. Is it violation of FEMA? I am a resident Indian. Please advise me.
Please contact your bank for the same. If you have not traded, it may be okay. Thanks.
I am a resident of Chennai (Tamilnadu) where sale of physical lottery tickets is banned since years. My question to you is:
1. Can I play international online lotteries like U.S Powerball, Megamillions, U.K lottery etc by registering in websites like thelotter.com or playhugelottos.com?
2. In case if I win huge sum, how can I get the amount transferred to my bank account? Is it legal to receive funds?
3. What are the taxes applicable as per our indian laws? U.S government charges 30% federal tax on winning lottery amount whereas U.K lottery winnings are tax free. How much total tax I have to pay?
4. Is DTAA applicable on winning lottery amount from U.S or U.K in their respective currencies? If yes, then please let me know on DTAA tax rates or total tax I need to pay keeping in mind the above scenarios.
Please advise as this would be helpful for me to proceed accordingly.
Regards,
Hardik
1. Not allowed.
2-4. Not Applicable. Thanks.
Can an Indian on tourist visa to Europe play any European lottery & in the event of any win open bank account with that money in European country utilise those money in europeafter paying applicable taxes? Is there provision for remitting those money in India after paying taxes? Will appreciate your pronpt response on this!
I would recommend not to do it. Thanks.
Sir why I can send my casino winnings in europe to India.If the money is tax free here in UK.I Hope I can send that all the money to India without hesitation.
Please give me brief Idea.
Don’t want to get in to any trouble.
If you are living outside India and are an NRI (under FEMA and Income Tax act), it is allowed. As residents are not allowed to send money for gambling, they can not win and may not transfer funds to India. If you are an NRI and need any help in transferring money, please contact us. Thanks.
Sir ,
I am in merchant navy and i have an nri account
So can i do binary option in forex pairs like eurusd, gbpusd etc.
Through recognised brokers.
Please advice sir
Thanks!
Doesn’t matter you have an NRI account. What matters is whether your residential status as per FEMA is “Non-Resident”. If yes, you can whatever you want based on the laws of resident country. Thanks.
I am a senior NRI with funds in Banks in India. As a senior retired person, I plan to stay in USA. With the upward trend in exchange rate of INR Vs USD , what is the best method of protecting my savings. Is it better to transfer money to my US bank checking account by giving an Indian Bank check?Or should i draw money using VISA debit card got from the indian bank? What are the other better options? US ETFs?
I am not a keen trader.
Thanks for your valuable advice. (preferably by email to mail Id)
1. I would keep 75% of money where I am living. If you are living in USA, I would recommend keeping 75% of your total investments in USA in USD. As an NRI, you are allowed to remit upto $ 1 million per year to USA from your NRO account. You may need a CA certificate in Form 15CB and filing of 15CA for transferring the funds. Please check with your bank. For investments options and where to invest, please contact us using the details in “Contact Us” page. Thanks.
I was working in USA since last 2 years and came back to India on 8th April 2016. I won $900 in scratch lottery on 4th April 2016 and I have transferred the lottery winnings to my NRE account on 5th April.
1. As I understand, the FEMA rules are NOT applicable to NRIs. Please correct me if I am wrong. When I won the lottery and transferred the winnings to Indian account, I was still NRI. So I think it was “legal” transaction. Since I came back to India on 8th April, I became Resident Indian from 8th April. Does this makes the lottery winnings transaction illegal?
2. Since now, I am Resident Indian for the FY 2016-17 for income tax purpose, do I have to pay tax for my lottery winnings? I have already paid tax for it in USA. Can I use DTAA benefit here so that I don’t have to pay tax in both USA and India?
Thanks !
1. I think it would be okay. Please check with your CA.
2. Yes. while you would need to include US income, you are still allowed to claim the rebate on the tax paid in USA. Thanks.
Hi, please suggest me …..
(1) if i give the forex fund managing service to out of India(to foreigners like in USA, UK…etc).And i will take 50% profit sharing fee for my fund managing service to my clients. Then i want to give the tax for earning by ‘forex fund-managing service’, it is legal or not in India?
(2) if i made some US Dollars in e-currency like perfect money by online selling any services or software in USA. And if i use these USD in forex trading(on eurusd, gbpusd, usdjpy etc.) even i will not transfer a bit of amount from outside of country(India) for forex trading. Then i want to give the tax for earning by forex trading, it is legal or not in India?
(3) And how much money i can transfer in my indian bank account?
(4) Can I trade in international commodities like gold,silver etc.?
Assuming you are an Indian resident, any trading in forex, directly or indirectly is not allowed by resident, whether money is earned in India or outside India. I would recommend trading in gold silver in India as they are also available in India and prices are based on international markets. Thanks.
Hello sir i want a trading in forex can i trading in forex in india without any problem plz sir reply
Only as hedging. Thanks.
Hello, can Indians do sports betting at offshore bookmakers i.e Bet365, dafabet which accept Indian currency via Neteller (whole transaction will be done in Inr)? Is it legal?
I am not sure about these betting platforms. As a rule, money can not go out of India for gambling. While you may be doing betting in INR, if you lose, you would pay in INR but the company that you pay to needs to remit funds in foreign currency. I would think those companies would be operating illegally and as a result, I would not recommend. You may ask the platform or company to provide FEMA confirmation or license or approval. Thanks.
Hello sir
I am a NRI and My husband is OCI holder. We dont have any NRE account in India. I am coming to india next month. I want to buy property there in delhi. Can i bring around 20000 euro with me for the payment of flat? I will open NRE account . But can i use this amount directly for payment after declaring it on Custom? This amount is from my husband salary .
Thank you
Regards
You would need to declare the cash/currency notes to Customs when you arrive as it is not allowed. Also, NRI is not allowed to pay for immovable property in currency notes. I would recommend opening NRE account and transferring funds from your foreign account to your NRE account. Thanks.
I am a green card holder and my wife too. My family lives in india for time being and my wife visit me. Can my wife convert rupees and bring dollars during her visit. How Much is allowed by RBI to convert and bring. Please let me know.
Your wife is an Indian resident and can bring $ as allowed for travelling purpose. However, as you are a non-resident (lives in USA), you can convert your bank account to NRO account and transfer funds from your NRO account to your US bank account upto $1million per year as allowed by RBI. Thanks.
Hello
As on today I am an NRI. If I sell a property in India which was purchased in INR, I would pay capital gains net of indexation and balance amount would be in my hands in INR. IF I remit that amount to my country of residence how much tax do I pay in India for the remittance?
Thanks and regards.
There is no tax on remittance. Tax is only on income i.e. capital gain on sale of property after indexation. Thanks.
Hello,
I am working in Dubai last 1 year. My question is can I tread in forex (EUR/USD EUR/GBP GBP/USD)
and my status is NRI or not and how much amount transfer my bank ACC. in India
As you are an NRI (living and working in Dubai), you are allowed to trade in forex OUTSIDE India. As an NRI, you may transfer funds from your NRO/NRE account with or without restrictions and after following procedures as per RBI guideline. Once money is with you in Dubai, you may trade. Thanks.
Thans for answering. One another questio, i want to open forex trade account with uk forex broker so can i use my indian Id as a proof
As you are an Indian Citizen, you may use Indian Passport as an ID proof. Thanks.
Thanks
Sir,
I want to trade forex trading with foreign broker sitting in India, is there any way out to trade forex legally.
No. Trading in forex by Indian residents outside India is not allowed. Thanks.
Sir,
While travelling abroad I have availed local transport for travelling inside city. He has sent me his bill. Can I pay it through Paypal this amount? Whether this amount will get counted in LRS limit? for kind advice please.
Payment outside India for travel is an allowable remittance and you will be able to send the money out. I am not sure if you can transfer via Paypal. I would transfer through bank. Thanks.
Dear Sir,
My client is Pakistani citizen and shifted to India from last one year. He wants to receive money from US from his relative for his day to day living expenses. He is Doctor. What is the limit up to which he can receive forex?? Please guide me
As your client is a citizen of Pakistan, he would need RBI permission for opening a bank account in India. I think he can receive gift from his relative for his day to day living expenses, which I think won’t be much. I am not sure of any limit but please contact the bank and/or RBI. Thanks.
Hi,
This post is indeed useful and moreover the comments section is even more informative. After going through all the comments and your replies I understand that trading in forex markets is not permitted for Indian residents. I would like to ask a couple of questions;
1) Are there any chances of forex trading being made legal in India? Just a couple of months back, RBI has allowed trading of cross-currency derivatives like EUR-USD/GBP-USD in India. So will the actual forex trading be made legal in India any time soon?
2) I have gone through all the circulars/advisories/notifications/press releases issued by the RBI in terms of forex trading. I see that they mention that forex trading is not permitted and violates the FEMA act. On some portals, it is also said that forex trading is a non-bailable offence in India. I want to know what exactly are the implications and the punishment in terms of bail money/fine/jail term, etc.
It is very sad to know that you cannot trade in one of the biggest markets in the world. Hopefully it will be allowed here in India like in other countries. Till then there is no other option other than to wait.
Thank you.
1. Forex trading in India is legal for residents. As INR is not fully convertible, I am not sure whether or when forex trading outside India will be allowed.
2. Don’t do it because it is not allowed/ not legal. Severity of punishment should not be the deciding factor. Thanks.
Dear Jigar,
I am an NRI working in Dubai. I have around 18 lacs rupees of FD in India in a normal account (not NRE). I want to bring back that amount to Dubai and then send it to my NRE account. I want to bring that amount to Dubai in USD or AED. At current rate, amount will be little above 26000 USD.
Am I allowed to carry this much of USD while going back from India? What is the other alternative to bring the amount to Dubai?
Thanks in advance.
Instead, I would recommend to change your resident account to NRO and then transfer to NRE. NRO to NRE transfer is allowed under FEMA. Thanks.
Hi Jigar, I am Rahul from Mumbai. I have been following your posts and there is lot to learn. Thanks for all the valuable information.
Well I have a query regarding Binary Option Trading. From your recent comments it is clear that Binary Options trading is illegal for Indian Citizens. I have gone through FEMA, SEBI & RBI policies.
But recently i found out Binary Options is Legal in India if you incorporate with a company and trade? What does this mean? Can you please describe this if possible. If I want to trade in Binary, what do i have to do next? I want to be a full time Binary Trader. Please help. Thanks in Advance 🙂
You can trade in all the securites or options that are traded in India. Only for trading outside India, there is restriction for trading in forex derivatives for an Indian resident. I think it would include resident individual, firm or company. Thanks.
Hi, Thank you for your reply. Well I have gone through some blogs and sites recently. They say Forex trading is legal in India only if you incorporate with a company or a corporation. Secondly we have to use free dollars from our reserve and lastly the leverage will be less than 10. I want to know the whole process if you can help. Thank you in advance 🙂
You may ask them (who advised you to do all these) to provide the FEMA rules to understand the requirements. I think forex trading can only be done by residents as hedging. I am not sure about forex trading as business. I suggest you consult someone before going through all these procedural hassles. Thanks.
Sir,
I am a resident of India and have played a lottery
Online in Dubai. Although I read in your blog that
It was illegal.
In case I win , what will be the formalities to get this
Money to India?
Please suggest.
Thanks in advance for your kind help.
Don’t do it again. Thanks.
Hi,
I am from India and trade Indian markets. I really want to trade derivatives on NYMEX,CME,etc…I know many people have asked about the legality and stuff. But if you really want to do this (trades international futures, forex), how would you somehow do it legally and still be an Indian resident? I would really want an answer for this but if it is really impossible, then you will have to become an NRI till you the time you do it……Basically can you please tell me if there is a loooong cut (if not a shortcut) to successfully trade the international markets? Pls dont say its impossible or cant answer. If not here, pls mail me in my given email address. I feel helpless. Nobody is able to help me in this regard till now.
You can trade in equity derivatives and not in forex derivatives. Thanks.
Hi …. I was an NRI who returned to India many years ago. I am now a resident Indian since many years, having legal and tax-declared funds still lying in a US Bank account till today.
Is it legally safe for me to open a forex trading account with these funds and trade freely in ALL currencies sitting here in India, using ONLY these funds?
I am asking this since forex trading is illegal in India, but this is my own legal money lying in US since all these years. Am I violating any RBI, FEMA etc rules if I start doing this?
1. As you are a resident, you can trade in forex on exchanges as allowed in India. You are not allowed to trade in forex outside India.
2. As you are an Indian resident under FEMA, by trading in forex outside India, you would be violating the FEMA laws. Thanks.
Rohin, you can trade forex only if you maintain NRI status that is if you are still holding a US passport
Other words you can live in India permanently and can still maintain your NRI status as US income is taxed globally.
You can open an NRE account in India if you are a US passport holder. In this case your NRE account will be taxed by Indian Income Tax Authority as you are staying as resident in India.
What you cannot do is transfer funds directly to any broker account from India. It is strictly prohibited to transfer funds from your Indian bank account to broker account for marginal trading but you are freely allowed to transfer funds from your Indian bank account to US bank account without restrictions if you are a US passport holder or use your US funds in your US bank account for forex trading. You cannot transfer profits directly from broker account to India bank account. You can only transfer from your US Bank account to Indian bank account to NRE account
If an OCI or NRI (working in UAE) is doing business in US, Canada, Australia, etc or working in Guld and stays for more than 6 months in India, then it is deemed as resident, so therefore you will be taxed on world wide income in India. After you pay your taxes in US and get your income tax statement, then you have to show it to Indian Income tax authority and pay the difference based on the income tax rates.
1. NRI status is not subjective but is objective i.e. based on actual days spent in India and your intention to stay in a country.
2. If you are a resident, you are not allowed to maintain NRE account but must have a resident account. Even US citizens living in India (my daughter) is an Indian resident and can only maintain resident account. All FEMA rules and regulations relating to Indian Resident would apply even to US citizen. Citizenship is an immigration issue and has nothing to do with taxation.
3. The forex traders may tell you and show ways of doing forex trading but in their record, they would have mentioned NRI and not resident as they would go by your declaration and the brokers make sure the money trail is from NRE or foreign funds so they are covered. But, in future, when there is a query (Enforcement Directorate (ED) scrutinizing credits in NRE accounts – Economic times 30/09/16), the investor would be the one getting all the notices and subject to penalty, if any.
4. Don’t do it – invest as resident if you are an NRI and invest as NRI is you are a resident. Thanks.
Hi Sir,
I have opened account with Interactive brokers for trading in US listed shares. (Only equity shares and not other type of securities)
Can I wire transfer fund to broker’s account?
Thanks.
I am an Indian Resident.
Yes.
Thanks
Hi What purpose code did you use for this transfer to the trading account?
thanks
Harish
Hello Sir,
NRI was in abroad for 7 years, NRI sent all his money to NRE account and returned to India. How many years he will be exempted for taxation while he is resident now?
For Example:
Stayed outside India period 03 APR 2009 – 28 Mar 2016
Staying in India period from 29 Mar 2016 …..till date…..
Thank You.
C.Borron
The amount in NRE account would be taxable from the day of return as you are not allowed to maintain NRE account after returning to India. You may transfer funds to RFC – Resident Foreign Currency account, where you can enjoy tax-free income until your status is Not Ordinary Resident. In your case, the interest would be taxable from March 29. You may take interest from April 1 as taxable income for simplicity. Thanks.
Hello Sir,
I just need only info, i have already converted NRE to SB Account on Mar 30, 2016. so for these, is there any exception while i was stayed 7 years abroad.
thank you
No exception/ exemption for any Indian income, except FCNR/RFC deposits for Not Ordinary Residents. However, Indian tax laws allow many avenues to generate tax free income. Please contact us if you need our guidance for the same. Thanks.
Dear Mr.patel,
i have nre account and i have open a binary option account. i would like to know that if i fund the account with my VISA DEBIT card will be any problem in the future? and i will get remitence in same account.
i need your opinion to avoid any future problems.
thanks.
RAHIM
I would assume that the VISA debit card is of NRE account. Also, that you are allowed to trade in options. Thanks.
Is binary option is restricted for Indian resident. To remit the fund from India through debit/credit card.
I don’t think so. An NRI can trade in all the options outside India. A resident is not allowed to trade in options related to Forex. A Resident can trade on all the other options – commodities, equity, etc. in the recognized exchanges. Thanks.
Hi Sir,
If I play international lottery through online conserige service website and win a jackpot of $100 million ,fly to collect the win personally ,open an account in foreign bank deposit the money and then transfer the amount to India bank account is this legal according to FEMA rules ???
Orelse what should be done ?
If you are an Indian resident, you are not allowed to send money to outside India for playing lottery or for gambling. As you can’t send money to buy tickets, you can not win. Thanks.
Hi, As a Goan I have taken Portuguese citizenship and also have an OCI . I am living in India and have not left the country. I am planning to go on a holiday to Thailand. When I went to get forex I was told that I cannot get forex. As only India citizens can get forex and for foreigners upto the amount they brought into the country. But I have never left the country. Please advise how can I get forex for my travel. Thank you
I think you may be able to get the forex. Please contact your bank or another forex dealer. Thanks.
Hello Sir, I am From India,and I want to trade currency pairs in binary tradings,my question to you is 1.Is it legal?.2.If it is legal then is it taxable? Thank you in advance Sir
1. It may not be legal for residents as per FEMA.
2. Any income, in our outside India, is taxable for Ordinary residents as per IT Act. Thanks.
Dear Sir,
I am currently an NRI in the US and trade Forex for a hedge fund ( i.e. leveraging the hedge funds money ) and get paid a % of any profits generated .
I am planning to return to India for good. Can I continue to trade Forex for the hedge fund after I return. I realize that it is not legal for Indian Residents to trade forex. However , in this case , I am not trading with my funds and on behalf of a US based fund as a trader.
You may not trade in your name. You may trade as an employee of a hedge fund company. However, you would need to include your salary income in your income tax return in India. Thanks.
I am currently in UK for a period of 7 months after which I have to return to India. Is it fine for me to trade in binary options (including forex) which is funded from my UK bank account?
Also, if I make a significant profit, will I be able to transfer this to my bank account in India (not an NRI account).
Thanks,
Rakesh
You would be a resident as per FEMA and Income tax as your stay in UK (outside India) is only 7 months. I would not recommend investing in forex trading. Thanks.
Sir, I want to know is it legal to purchase tickets online of foreign lotteries (megamillion and powerball) from online concierge ticket services websites (lottoland and thelotter etc.) in India?
If it is legal then how can I pay for the tickets as they accept payment from Neteller , Skrill and so on.
But these sites are declining my payment when uploading money on these sites.
On chatting with customer care executives of Lottoland and Thelotter, both said it is legal but for payment I have to ask my bank authorities.
Please, do put your thoughts on this.
Thanks.
Indian residents are not allowed to remit money for playing lotteries so you are not allowed to buy the same. Thanks.
If won prize playing without paying money (lottoland website gives a free ticket for its first time users). Can I bring money to India?
Thanks
When you win on the free ticket, please contact us and we will help you. However, as mentioned, you can not remit funds for buying lottery outside India. Thanks.
hi, i am a medical student, studying in Caribbean. i have already started trading forex using inr from my indian debit card which i didn’t use directly i used a online wallet like skrill.com to load usd into my online forex broker. now i have some profit with me so my questions are:
1.can i with draw this profit to my online wallet like skrill or netteler or paypal and then afterwards to my indian account in small fund (lets say 500$) at a time ?
2. can i open a nre account since am a student and withdraw my profit i made from inr i took from by account using online wallet.?
3.even if i can do question number 2 will the fema know that i took money form indian account to online wallet(skrill) and used it to load my online broker account to trade?
4. if i can do this do i have to pay tax for my profits ?
5.if a nri(student without any job) want to trade forex how should he do it ?
6.if i want to trade new york stock exchange from india is it legal or do i need a nri account for that and do i have to pay tax for the profit i make from it. ?
If you are an NRI, you may trade in forex outside India, provided your country of residence allows. However, when you become a resident, you are not allowed to trade in forex. I would advise you to change your residential status as NRI. Thanks.
Hello,
I am an Indian Resident. I want to open Brokerage Account on USA for Trading in Equity shares of listed companies. (Not Forex).
I want to wire transfer funds for the same purpose.
Is it allowed?
If yes, then as per LRS, which purpose code to be mentioned in Form A2?
Is it Foreign Portfolio Investement i.e. Indian Portfolio Investment Abroad in Equity Shares?
Also, assuming that the Prime Minister’s next target is declaration of Foreign Investments, can I officially declare it to income tax authorities?
Thank You.
1. Yes, you are allowed to invest in foreign shares and securities under LRS. It is not FPI- Foreign Portfolio Investment. FPI is a term used for foreign investors in India and not Indian investors outside India.
2. The declaration of foreign investments and income has already been incorporated in the income tax returns since last 2-3 years under Schedule FA. Yes, you would need to include your investments and also any income generated from those investments in your Income Tax return. Thanks.
sir :
when i approached axis bank , they are saying its not possible to wire transfer to US for the purpose of trading .. is there any procedures which i should get in order to get the permission to transfer the funds ?
thank you for your time .
You are allowed under LRS – Liberalized Remittance Scheme to invest outside India. Please inquire about the LRS and procedures / document requirement to transfer the funds. It is possible that the person you talk to may not know. Talk to the right person or the forex team. Thanks.
hi
i saw your question whether its possible to wire transfer the funds to USA online.
could you transfer the funds to futures broker in US?
kindly share your thoughts . i am also into this same dilemma . please do reply
maybe you may get any info from which you dont know and vice versa
thank you
Dear Sir,
I’m living in UAE and I have a binary option account from a US broker company and I have made profit of 10,000$ and now that company is asking to pay IRS tax and IMF tax so that i can with draw my profit.
Just want to know that is it applicable or should i have to pay this amount without paying can i make with drawl?
thanks
Kamran
Any income, other than exempt, would be taxable. This may be difficult for a UAE resident to understand. You would need to pay tax as per the laws of where your income is generated and/or your resident country. Please consult your CA/CPA. Thanks.
Dear Jigar Patel,
I would like to know whether a resident Indian with foreign income (generated through online job) is allowed to invest and trade futures market with US broker?. Kindly note all my foreign income is in USD and i receive it to my Indian bank account i.e., Exchange Earners Foreign currency(EEFC) account which is also in USD
With Regards,
Anil
As an Indian resident, you are allowed to invest outside India under LRS – Liberalized Remittance Scheme. So yes, you can invest in stocks and futures. However, not in forex, except for hedging purposes of your foreign income. Hacing funds in EEFC account or having foreign income not that important. Thanks.
Hello,
How much amount allow RBI/FEMA to remittances from US without any restriction.
Residents – $250,000
NRIs – $1,000,000
The limit is per person per year. However, some procedures/ documents may be required to be submitted. Thanks.
Your contact details and number and of u are in usa say your whatsapp number
Regards
Parixit /kinjal usa
We are based in India. The contact number is the magicjack number as a convenience for my US customers. I am also on whatsapp but with my India cell number. Please check “Contact Us” section for details. Thanks.
Hi
My son got admission in MBBS through NRI quota. Fees payment is yearly. But after one year I am back to India and became resident Indian.
Logically I cannot pay the fee in USD as I am a resident Indian. Will college accept Indian Rupee for fees.
Appreciate your input….
I would advise you to contact the college and explain. I think they would be able to accept the same. Thanks.
Hi!
I live in India but doing international consultancy services into commodity trading brokerage,Banking instruments facilitation. If I get a commission paid from overseast, then
1.what is the max limit for which income tax is needless to pay?
2.Is there a limit to receive such commissions to my saving account?
3.Should I really need to open up a current account to receive such commissions as unlimited amount.
4.How the TAX structure is defined for saving account and current account for receiving foreign remittances as trade/consultancy commissions
thanks and regards,
1. As it is your income, you would report as a part of your total income and pay tax at an applicable rates.
2-3. I don’t think so but you need to have strong evidence. My advise would be to have a business/current account and report as a part of your income from business/ profession.
4. As long as you pay the tax on your total income (#1 above), you are okay. Also, it can not be for a transaction in violation of FEMA provisions. Please note that NRIs are not allowed to trade into commodities. Thanks.
Sir I have one question. I win 15000 dollars. In Las Vegas and they give. Me cheque. Of my Indian nre acount and I want to deposit to my acount how is it possible
1. Why would you give your Indian NRE account to the casino for cheque? It may raise suspicion.
2. That being said, if you are an NRI living outside India, you may be allowed to play and win lottery/game of chance. However, as money is directly credited in NRE account, it may be termed as an income received in India and may become taxable in India. Thanks.
Hello Mr. Patel
I am an Indian Citizen an have opened up a LLC in US with my uncle and father as other members in the same LLC. My father is also an Indian Citizen and Uncle (Fathers real brother) is a US Citizen. I need to remit money (hard earned indian Tax paid money) from India from my personal Saving Bank Account in that new LLC in the US. What is the procedure to be followed? Are there any restrictions / tax implications? What is the max amount limit that can be remitted? Please guide.
Thanks
1. This is covered under Indian Investments abroad and is allowed subject to certain conditions – nature of business, amount of transfer, etc. The current limit is $250000 per person per year under LRS- Liberalized Remittance Scheme of RBI for resident.
2. As majority ownership would be Indian, i.e. management controlled from India, the LLC may be taxed in India.
3. Please contact your bank and CA for the same. Thanks.
I am a US citizen for the last one and half year and is also OCI . As per IT rules I am a resident of India. But I donot know whether I am a non resident as per FEMA rules. Soon after my reaching India I had opened a NRO a/c with one of the banks while maintaining my savings accounts with other banks, which were opened 10/15 years back, as I receive dividends from mutual funds etc. Now my question is whether I can convert my NRO a/c into normal SB a/c as I am going to stay in India for very long time. This is advised by banker not to have problems like dual type of bank accounts. I request your kind advice as I am 76 years old and may not be able to make trips .I am planning to sell my 40 year old house bought in rupees and request you how to manage the outcome of sale. Thanking you in advance for your guidance to so many people. Gurunadh
Thanking you in advance for your reply. Gurunadh
1. If you are a resident as per income tax (staying in India for 182+ days), there are likely chances that you are also a resident as per FEMA.
2. Yes, as you are a resident and going to stay in India for a long time, you need to change the account to resident account.
3. As you are also a US resident, you need to plan your investments and taxes keeping in mind both Indian and US tax laws and compliance requirements. Thanks.
As an indian resident, can i open account in foreign country to trade in US gold futures & Crude oil futures. I will also disclose the same in income tax
I think you can trade in gold and crude oil in India only through MCX. As both gold and oil prices are internationally monitored the return would be similar. Thanks.
Hi sir i wants to know if any person from india or give gift 150000 usd as a gift to his son working in usa and son wants to return he can without paying any tax in usa and india or son also can give gift same amount to his father
When you have a pre-condition, it is not a gift but a loan. So while you may give and take gift from son, you may need to make declaration to IT department and India and USA (IRS) for the same. You would also need to understand the gift giving limit for any US resident (your son) as per IRS is $14000 per person per year. Thanks.
Hi Sir,
Request to clarify my below doubts.
Myself going to join a Malaysian based company. I will be under their company roles in Malaysia (they don’t have office in India) and my role will be to take care of Sales & Marketing of their products in Indian market.
* My salary will be directly credited by them in USD
a. Can i get my salary credited into my Saving account without additional taxes? What would be general charges for saving account? ( OR )
b. Should i need to open any special account for minimum charges & taxes?
* Is there any other formalities to be done for getting my salary?
can you guide me on above, as to which bank should be considered/account type etc., to get my full salary w/o much charges.
I would request you to open an account in Malaysia or any country outside India and credit the salary in that account to save any income tax related complications in India. You may transfer funds immediately from that account to your NRE bank account in India and invest/use the funds from NRE account for purpose. Thanks.
Hi,
I wanted to start my own financial markets consultancy which includes forex, commodity, indices and other derivatives. I live in India, but would be catering the investors based overseas like UK, UAE etc. The trading account is compliant and registered on their name with one of the brokers. My responsibility is to advice or manage their trading account in return as commissions to the profits i generate. Moreover, i have registered my company under broker services from indian company registration portal and have a current account on the business name. How far am i being legitimate? Your guidance would be highly appreciable.
Thank You Sir.
I think you are okay provided the investments by your NRI clients comply with FEMA rules. There may be some restrictions on trading in commodities, derivatives and forex transactions for NRIs. Also, some procedures for trading in stock market. Thanks.
Hi, I am an American Passport holder and also an OCI card holder. I have been living in India since more than 20 years. I work here as well. Since I am travelling abroad, I need to avail foreign currency (Cash/forex card). Am I eligible?
Yes, you are a resident of India for FEMA and are allowed the forex equivalent to / same as a normal resident of India. Thanks.
I am an NRI living in Dubai. I am transferring my earnings from salary in Dubai to NRE account in India.
(1) Is it possible to deposit the money available in NRE account using Visa/Master Debit card of NRE account online to Binary trading broker in UK (Cysec Regulated). UAE laws permit to trade in Binary options.
(2) Can I withdraw any winning trade amount say Eg:15,000$ directly to my NRE account. Is this legal in India.
NRE Account Debit Card -> Online Deposit-> Cysec Regulated Broker in UK
Winning Profits -> Withdrawal-> NRE Account Directly
Kindly revert with details
1. I would recommend transferring funds from your Dubai account to your UK.
2. You may deposit the winning profits to your NRE account. However, I would recommend having a Dubai account in the middle.
In summary, I recomment following to avoid any future complications:
NRE –> your account in Dubai or any other country –> UK broker
Winning profit from UK broker –> account in Dubai/other country –> Indian NRE. Thanks.
You are simply great with goodwill attitude……Thank you Mr Jigar. I submot my query:
I and my son are NRIs at Dubai, joint family, holding joint NRI and NRO account. I have property in Bangalore jointly with my wife. My son has property in his name at B’lore. My son wants to buy a HOUSE at DUBAI for his stay with family. I want to sell my property to help my son buy the house at Dubai. I purchased the flat at Rs.70 Lakhs in 2013, and I may get Rs.1.1 Crore in 2017. Can I transfer the amount to Dubai through our NRI Joint A/c Or is there any mode of transfer to Dubai ? I want your assistance . Can you please guide me?
As the sale of property can result in capital gain, you would need to pay the tax on the same in India. After payment of tax, you are allowed to remit the funds out of India after submitting CA certificate in form 15CB, filing form 15CA and submitting other documents as required by the bank. In short, you are allowed to remit entire AFTER TAX amount to Dubai. Once money is in Dubai, you may help your son in buying a property. Thanks.
Hello sir
My question is
I am going to dubai on visit for 3 months from january to april 2018.
Can i trade forex in dubai using my indian account and transfer the profits within that 3 months of time.Is it legal to do so on a visit visa ?
You would be a resident and even if you are outside India, FEMA will apply. So, if you are not allowed to trade in forex in India, you are also not allowed to trade in forex outside India if your residential status is “Resident” of India. Thanks.
Hello sir
I am trading binary options through IQ option and made a profit of $100000 and I want to withdraw my profit.as it is illegal to withdraw my money directly to my account, can I use my friend’s account as a medium to transfer my profits to his account by neteller and skrill.
Thank you Sir
If it is illegal to withdraw your money into your account, it would also be illegal to transfer the funds to your friend and then transfer to yours. Any transfer to your friend and back may also be subject to inquiry by RBI or Income tax. Thanks.
1.if I worked in Dubai not more than 2-3 months,can I transfer money India to dubai for trading international forex trading purpose?
2.or am I wait for getting NRI status
3.or indian can buy immovable property out of India then after 2-3 months I can buy property in Dubai and getting loan on that property in Dubai and trading on that loan money because there is no violant rule for I am not transfer money out of India for forex trading purpose? answer me sir
1-3. You need to be an NRI to start your forex trading business out of India. Just by staying 2-3 months, you won’t be an NRI. You would need a resident permit of Dubai and need to continuously stay out of India (year over year) to continue your forex trading business. Thanks.
But once I will become NRI and live in Dubai atleast 2-3 year and pay tax in Dubai then can I bring my whole money to when I have to plan resident in India again?
And once I will become NRI can I transfer money from India to dubai for margin trading?
Once you are an NRI, you can transfer the funds outside India. How you use your funds is not material, provided you use them in legal activities. Thanks.
Once you become a resident, you would not be allowed to trade. Thanks.
And I am going to Dubai and start forex trading within first day of my Dubai day and that time I am not NRI but I won’t come back in India within 1 year in India,this is legal or illegal because in my bank account deposit and withdraw money shown on my first day ?
What is your plan after 1 year? As when you come back, you would be a resident from the date of your return. Also, I think only after you leave India, you may open NRO account. Your status would need to be NRI for all your accounts, investments, transactions, income tax in India. I would not recommend. Thanks.
Hi Sir,
I am currently Leaving in mexico from last 3 years .
I am planning to open an account in BET365 in Mexico Bank account and to play bet on Mexico currency.
Is it Leagal for an indian staying abroad [in my case Mexico where online bet is legal] to invest and play .
will this be recorded as illegal on my Indian records?
Thanks in advance.
Kindly advice.
As you have been living outside India for 3 years, you are an NRI. As an NRI, you are allowed to do anything that is allowed by your resident country any transaction OUTSIDE India. Thanks.
i have good strategy in forex trading so i would like to know that my friend is nri or nre or even green card holder then can i trade on his forex trading account and charge him certain fees and take it on my indian bank account
The source of fund and nature of transfer from your friend’s account to your account need to be determined and it should not be for forex trading by you. For any other nature, you would need to check the FEMA and income tax laws. Thanks.
Sir,
I had opened a trading account and an HSBC bank account when I was in the UK. Now I am back in India.
1] Can I continue trading (not investing) in stocks in the exchanges of US / UK?
2) Can I continue trading indices (global) from my trading account?
3] Can I continue trading in Forex, while the money will only accumulate in the UK bank account. I will pay taxes when I transfer these funds to my Indian account?
Thanks in advance for your help sir.
1. Yes (no speculation)
2. Yes (no speculation)
3. Trading in forex is not allowed for residents.
4. You would need to pay every year whether you transfer funds to India or not. Thanks.
I am from india and i am doing binary option trading with foreign account manager and can i get my profit in my saving or is it compulsory to open an current account because the amount is big and also tell if the amount is less than 3000$ then can i get it to my saving account. Thank you
An Indian resident is allowed to invest / trade in India. However, he may not trade in F&O related to forex. Thanks.
Hello sir, will keep it short.
I have interest in trading into forex market
But as it is illegal in India?
1. What are the ways through which small amount upto 2000$, can I transfer this amount into my Indian bank account.
2. If ever in future, I look forward to settle in abroad, work for 3 years for becoming Nri. And then coming back in India, trading through my foreign country bank account and transfer the money from that bank account into my Indian account or simply use the international debit card for expenses in India? Thanks.
As India is always short of foreign exchange, any speculation in forex is not allowed. Also, INR is not a freely and fully convertible currency as there are certain restrictions on convertibility of INR in to other foreign currency and vice versa. Also, exporters are allowed to hedge only upto the exposure (export). So, trading in forex market is not allowed and not recommended. Thanks.
We are US citizen & inherited money & property from his Indian citizen parents. We are planning to transfer some money if we sell property in India after transferring from Nro to Nre acct. What is the tax consequences in India & US? What ever amount of inheritance money you transfer do you pay income tax in US also? Is there any limit on transfer how much money can you transfer in a year to US? Any other tax form need to file? Any help would be greatly appreciated.
There is no tax on inheritance. However, you would need to pay tax on any income on sale of property. As a US citizen, you would also need to pay tax in USA. However, you would be able to claim the tax credit in your US tax return for tax paid in India. As per FEMA laws, an NRI is allowed to remit upto $1million per person every year without RBI approval. I hope this helps. If you have any question, please contact us for better tax and investment planning. Thanks.
I am living in Thailand from last 3 years and working online for my Indian company. My salary is getting credited in my Indian salary account and I am paying the taxes as well to the Indian Government.
My question is do i need to open another account?
If your company pays you salary in Thailand, it may not be taxable in India. In such case, it may be advisable to have another account. However, as you are an NRI, it is recommended to inform your bank of the change in status, update your KYC and hold/invest as NRI i.e. you would need to convert your resident account to NRO. Thanks.
Hi,
I am a seaman working in a foreign shipping company.I am an NRI year after year due to being in India for less than 182 days every financial year. Can I do forex trading with foreign brokers and let the money come into my NRE account? What are the tax implications, and how do I show these?
I would suggest you do forex trading out of India from an account in any country other than India. You may have some restrictions about trading and/or currency pairs. Thanks.
Hello Jigar,
Following is my Question.
Under the LRS scheme for resident Individual that has a limit of $250,000 per year, I am an Indian Citizen and would like to gift $250,000 to my son, who is US citizen in November,2019,which i understand that i am allowed to remit. I would like to know that can my wife,who is Indian Citizen can gift another $250,000 to our son in December,2019 ? Is it allowed that father and mother are gifting $250,000 each to their son in same accounting year ?
Yes, it is allowed. However, the money should be of the person remitting i.e. you may not transfer YOUR money into her account or vice versa to show separate gifts. Clubbing provision apply for gift to spouse and is considered as if the giver’s property only. Also, there is no need to have differnt months. Both of you can send $250,000 each on the same day to your son. Thanks.
Hi Naresh,
Can I apply for Dubai general trade license for International forex trading purpose.
But I will stay in India once I got General trade license from Dubai and want to continue forex trading with international forex broker. Is it legal? also is Dubai will allow general trade license for internation forex trading. please clarify
Many Thanks,
Vishnu
Indian resident are not allowed to trade in foreign exchange outside India and we do not recommend the same. I am not sure about the Dubai rules for trade license. Thanks.