Invest in Indian Railway Tax Free Bonds – Download Application Form Now.!!

January 19th, 2012 | Posted by indiatax in India Bonds - (0 Comments)

Indian Railway Tax Free Bonds - IRFC BondsIndian Railway Finance corporation Ltd. (IRFC) is a dedicated financing arm of the Ministry of Railways. Its sole objective is to raise money from the market to part finance the plan outlay of Indian Railways. The money so made available is used for acquisition of rolling stock assets and for meeting other developmental needs of the Indian Railways.

The borrowing programme of IRFC is guided by the requirements projected by Ministry of Railways. IRFC is notified as a Public Financial Institution under Section 4A of Companies Act, 1956. It is registered as a NBFC-ND-IFC (Infrastructure finance company) with reserve Bank of India.


>>> Highlights of Tax Benefits:

1. The Income by way of Interest from these bonds is fully exempt from income tax and shall not form part of the

total Income as per provisions under section 10(15)(iv)(h) of IT Act.

2. There will be no deduction of tax at source from the interest, which accrues to the bondholders on these bonds

irrespective of the amount of the interest or the status of the investors.

3. Wealth Tax is not levied on investment in Bonds under section 2(ea) of the Wealth-tax Act, 1957.

>>> DOWNLOAD Application form of Indian Railway Finance corporation Bond – IRFC Bonds: || CLICK HERE ||


>>> Sailent Features of Proposed Tax free Bonds:

1. The Company shall issue Bonds upto an aggregate amount of Rs 6,300 crores in one or more tranche(s), on or

prior to March 31, 2012 pursuant to CBDT’s Notification dated September 23, 2011 which authorised the Company

to raise tax free bonds aggregating up to Rs 10,000 crores in the financial year 2011-12.

2. Credit Ratings of “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE and “ICRA AAA by ICRA indicating Highest

Degree of Safety in terms of timely servicing of financial obligations.

3. Bonds to be allotted on first-cum-first serve basis up to the limit reserved for each category of investors.

4. Bonds can be held in physical or in dematerialized form, at the option of bondholders.

5. Bonds are proposed to be listed on the BSE and the NSE.

>>> Who can apply for these bonds?

1. Resident/ Non Resident Individual, HUF’s.

2. Partnership Firm/ LLP’s.

3. Companies/ societies registered under applicable laws and Authorize to invest in bonds.

4. Registered trust authorized to invest in bonds.

5. Public financial Institution as defined in section 4A of companies Act.

6. National Investment funds/ Mutual funds/ Foreign Institutional Investors (FII’s).

7. Insurance companies registered with IRDA.

>>> Who cannot apply for these bonds?

1. Foreign Nationals.

2. Minors without a guardian name.

3. Overseas Corporate bodies.

>>> Indian Railway Bond Application form – >> DOWNLOAD HERE <<

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NRI Real Estate & Immovable Property Rules and Regulations in India.

October 1st, 2011 | Posted by indiatax in Real Estate India - (0 Comments)

>> A NRI/PIO is permitted to acquire by way of purchase immovable property in India other than agricultural property/plantation/farm house.

>> A NRI/PIO can pay the purchase price out of funds received in India through normal banking channels by inward remittance, or by way of funds held in Non Residents account.

>> A NRI/PIO can transfer such immovable property (other than agricultural property or plantation or farm house) to a person resident in India or a non-resident Indian citizens or a PIO.

>> A NRI/PIO can transfer agricultural or plantation property or farm house only to Indian citizen resident in India.

>> A PIO may acquire/transfer immovable property (other than agricultural property or plantation or farm house) by way of gift from/to a person resident in India or an Indian citizen resident outside India or a PIO.

>> A Foreign Embassies/Diplomats/Consulate General in India are permitted to purchase or transfer property in India, if they had obtained clearance from Ministry of External affairs.

>> The consideration for acquisition of immovable property shall be paid out of funds remitted from abroad through banking channels.

>> A NRI who has any place of business in India for carrying on his business activities is permitted to acquire an immovable property which is necessary for or incidental to carrying on such activity in India.

>> A Foreign national resident outside India are not permitted to acquire any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India.

>> A Foreign national is not permitted to transfer such property without prior approval of RBI.

>> Persons of Indian origin residing in Pakistan, Bangladesh, China, Afghanistan, Iraq, Nepal, Sri Lanka and Bhutan are not permitted to own or acquire any property in India.

>> A NRI/PIO is not permitted to make payment by traveller’s cheque or by foreign currency notes.

Repatriation of Sale proceeds

Where a NRI or PIO sells his immovable property in India (other than agricultural property or plantation or farm house), the Authorised dealer is permitted to allow repatriation of sale proceeds outside India:

  1. If the property was acquired by the seller in accordance with the provisions of foreign exchange law in force at the time of acquisition by him:

>> the amount to be repatriated does not exceed:

  1. the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels, or
  2. the amount paid  out of funds held in Foreign Currency Non-Resident Account,  or
  3. the foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; and
  4. in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

2.   In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India, the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account.

3.  NRI/PIO are also allowed by the Authorised Dealers to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account / sale proceeds of assets by way of purchase / the assets in India acquired by him by way of inheritance / legacy.

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Comparison between PIO vs OCI Card – which is better?

September 13th, 2011 | Posted by indiatax in PIO vs OCI Card - (0 Comments)

1.      PIO(Person of Indian Origin) card

Person of Indian Origin can apply for PIO card. Following persons can apply for PIO card:

a)      Anyone who ever held an Indian passport.

b)     Anyone whose parents or grandparents was born in Undivided India and did not migrated to Pakistan or Bangladesh.

c)      Anyone whose spouse is citizen of India or person of Indian origin

Nationals of Pakistan, Bangladesh, Sri lanka, Afghanistan, Bhutan, Nepal and China do not qualify for PIO card.

Benefits of PIO Card:

a)      Freedom to enter or leave India without Visa.

b)      Acquire non agricultural and plantation property in India.

c)      Privilege of separate counters for immigration at international airports in India.

d)      Admit children to all educational institutes in India under NRI quota.

e)      Apply for various housing schemes of LIC, state government and other government agencies.

2.      OCI (Overseas Citizens of India) Card

All overseas Indians who migrated after 26th January, 1950 can apply for OCI status. Indians settled in Pakistan and Bangladesh cannot apply for OCI status.

Person of Indian Origin of certain categories who migrated from India and acquire citizenship of foreign country, other than Pakistan and Bangladesh are eligible to be granted as OCI.

Benefits of OCI Card:

a)      Lifelong Visa to India for any number of visits, and for any purpose.

b)   Enjoy the same benefit as NRIs in economic, financial and educational fields except in purchase of agricultural property.

3.      PIO’s V/s OCI’s

a)      OCI is entitled to lifelong Visa free travel to India but for PIO’s it is limited to 15 years.

b)      OCI is exempted from any registration with Indian police for any length of stay in India whereas PIO cardholders are required to register at foreigners Registration office at District headquarters if their stay exceeds 180 days in India in single stretch.

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Things to be Remembered for filing TAX in India.

August 23rd, 2011 | Posted by indiatax in NRI Taxation - (0 Comments)
  1. Previous year :- Previous year means the financial year for which Income is chargeable. Tax is always charged in respect of Income of the previous year i.e. the period beginning on 1st April and ending on 31st March.
  2. Assessment year :- Assessment year is the year in which you file your returns for the Income earned for the previous year, which had just ended. For Ex- Return for Income earned in previous year 2010-11 will be filed in Assessment year 2011-12 i.e. the period beginning on 1st April 2011 and ending on 31st March 2012.
  3. Previous year is always a period of 12 months.
  4. Tax is charged in respect of Income of Previous year in the relevant assessment year.
  5. NON RESIDENT is liable to pay taxes on-
    1. Income received or deemed to be received in India during relevant financial year.
    2. Income accruing or arising or deemed to accrue or arise in India during the relevant financial year.
    3. Income accruing or arising or deemed to accrue or arise outside India, but first receipt is in India during relevant financial year.
  6. Permanent Account number (PAN) is necessary for filing Income tax return in India.
  7. An Individual should leave India before 29th September in the 1st year of leaving from India for employment outside India, otherwise Income will be taxable in India as resident of India.
  8. An Individual should ensure to come back on or after 1st February on transfer of his residence to India, so that his total stay in India does not exceed 59 days. However, a person whose stay in India in preceding four previous year does not exceed 365 days, then he/She may return after 30th September of relevant year and save NRI satus.
  9. Dates Stamped on the passport are normally considered as proof of dates of departure from and arrival in India. Always ensure that date stamped on passport is legible.
  10.  It is always advisable to make chart for the number of days of stay in India for atleast 7 previous years.

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How can NRIs determine Residential Status for income tax filing?

August 19th, 2011 | Posted by indiatax in NRI Taxation - (0 Comments)

An Individual is treated as Resident in India, if any of the following condition is satisfied:

  1. Individual’s stay in India is 182 days or more in any tax year, OR
  2. Individual’s stay in India is 60 days or more in the relevant tax year and 365 days or more in aggregate in last 4 tax years immediately preceeding tax year for which residential status is determined.

If none of the above condition is satisfied then Individual is treated as NON RESIDENT. Continuous stay in India or at the same place is not essential but aggregate stay in India in any tax years is important. It is determined by the physical presence of an individual in India. The day Individual enters into India and the day he leaves India is relevant in determining the Residential Status.

An Individual is treated as Resident but not ordinarily resident in India if any one of the following condition is satisfied:

  1. Individual is Non Resident in India in at least 9 out of 10 tax years preceeding the tax year for which Residential status is determined.
  2. Individual stays for 729 days or less during 7 tax years preceeding the tax year for which residential status is determined.

Residential status determines the scope of income taxable in the hands of the assessee in India during the relevant previous year. Residential status may be different for different previous years. The taxability in India, for a PERSON depends upon his RESIDENTIAL STATUS and NOT upon his nationality or citizenship.

A HUF is Non Resident in India if control and management of its affairs is situated wholly outside India. Residential status of HUF is determined by the control and management of its KARTA. If Karta stays outside India throughout the tax year, then HUF will be considered as NON RESIDENT but if Karta stays in India for even a SINGLE DAY during tax year, then HUF shall be Residential.

A firm, AOP, etc. is said to be NON RESIDENT in India in any tax year where during that year the control and management of its affairs is situated wholly outside India.

A Company is said to be NON RESIDENT if:

1. It is not an INDIAN Company.

2. The control and management of its affairs is situated wholly or partially outside India.

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