Tuesday, 28 July 2015
Check Points for Your Investments Abroad
If you are one of those who has to travel and stay abroad for most of the time in a year owing to your professional life, you can actually consider investment options in those countries as well apart from investing in India. Investments in the international countries are not a difficult process provided you are aware of the various laws pertaining to income tax as well the exchange control.
In case of exchange control laws, the first point that should be taken into account is the quantum of investment. For any individual resident, the Reserve Bank of India allows remittances of up to a limit of Rs. 5 crore annually. This amount is approval-free and is released under the Liberalised Remittance Scheme. If the individual wishes, then he or she can remit additional amounts through the family members. The advantage here is the no restriction put on the number of times remittances are allowed if they are within the defined and overall limit. This helps in cases where the price is paid through instalments.
The second point that should be considered while investing in the overseas countries is that of the amount collected from the rental and the proceeds received from the final sale price. As an individual holding the Indian residency, the person has to leave the income collected from the rentals along with the final and actual sale amount from any of the properties located abroad into the bank account in his or her Indian bank within 90 days.
The third and final point is about the Income Tax that are involved with the properties bought abroad. There may be a variety of implications and complexities involved when it comes to taxes if there is any investment done in the properties in any overseas countries. There may be taxes involved if any Indian owns an immovable property and earns from the same. These income from the rentals earned might be taxable in India because the owner holds an Ordinarily Resident status in India. One must also take care of the income tax registrations, income tax file returns and similar other taxes. The tenant may be required to withhold any kind of tax that falls under the overseas country tax laws in the process of making payments to any landlord located outside India. Apart from these laws, one must consider the foreign exchange regulations of the country and understand the limitation that might be put in while selling off any property and letting go of any investment. The rentals earned will be considered taxable as are the second properties considered in India.