I am a non-resident Indian (NRI) living in Dubai. I do SIPs in six equity mutual fund schemes that amount to Rs1.8 lakh a month (Rs21.6 lakh a year). I do not have any income in India and every year I get refund for tax deducted at source (TDS) of debt funds. Assuming my return on equity SIPs in a year is 12% of Rs21.6 lakh (Rs2.59 lakh), I would like to churn my portfolio (units that have completed 1 year) every year before 31 March and reinvest the amount in same plan before 31 March. Will long-term capital gain tax (LTCG) tax reflect on my 26AS certificate? Can I claim refund as I do not have any income in India?
—Sabu Jose
An individual must file an income tax return in India when her total income exceeds the minimum exemption limit of Rs2.5 lakh. This income may have been earned from any source, including income from sale of mutual funds. Till 31 March 2018, income from sale of equity mutual funds held for more than a year is exempt from tax. LTCG tax will have to be paid on sale of equity mutual funds made on or after 1 April 2018, where these were held for more than 1 year. Also note that TDS is not applicable on sale of equity mutual funds, therefore tax on this transaction will not be reflected in your Form 26AS.
I am an NRI living in Sydney. I want to send money to my sister every month as her husband lost his job recently. I am planning to send Rs80,000 every month. I believe that there is tax exemption of Rs50,000 on such money transfers? If so, can you please tell me how can I reduce my tax liability on this? Alternatively, I can also send Rs50,000 to my sister and the remaining amount can be deposited in my mother’s account. What’s the best way to go forward? Please advise.
—Name withheld
Gifts of money made to ‘relatives’ are exempt from income tax. Relatives for this purpose have been defined in the income-tax Act and include your sister. Therefore, you can send the money directly to her. There is no tax implication if the money is not invested on your behalf.
I serve as a pastor, a religious leader, of a church in Brazil and I have permanent residency (PR) in Brazil, with a bank account there. I get my salary deposited in my account and I transfer that money to my Indian bank account. I wanted to know if I need to pay any tax to the Indian government, so that I am aware of the rules and am clear in the eyes of government.
—Name withheld on requestTo know whether your income is taxable in India, your residential status is to be checked. You have mentioned that you have a permanent residency of Brazil. In the absence of more details we assume that both the below statements are true.
(a) You have not spent 182 days or more in India or
(b) 60 days in the said financial year and 365 days or more in the past 4 financial years.
If you do not meet any of these conditions, you are not a resident of India, and your income earned in Brazil will not be taxable in India.
Archit Gupta is founder and chief executive officer of ClearTax. Queries and views at mintmoney@livemint.com.