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No need for Indian expats to declare foreign assets, says experts
July 18, 2017, 1:48 pm
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Anish Mehta, Secretary Institute of Chartered Accountants of India, Dubai

 Indian expats in the UAE have sought clarification on rules about declaring their bank account details and assets here to their government after confusing and misleading reports about NRI taxes got them in a tizzy.

Many tax experts have said that they were flooded with queries from Non-Resident Indians (NRIs) in the UAE following media reports citing new requirements for them to declare their bank account details and overseas assets came out in the past few days.

While Indian media houses published different and confusing versions of a new rule requiring NRIs to declare their foreign bank account details, a section of the Dubai press (not Gulf News) went a step ahead and republished a 2012 news agency report related to the same topic — which also cited the need for NRIs to declare their foreign assets as well.

Tax professionals

Tax professionals in the UAE who spoke to Gulf News on Monday said some reports from India about an amendment in the income tax return forms created an impression that the government was trying to tax NRIs for their bank balance abroad whereas the local report mentioned that they may be taxed on their foreign assets as well.

However, Neeru Ahuja, partner at Deloitte India, who was quoted in the 2012 media report published in Dubai, confirmed to Gulf Newsthat it was an old report.

“The NRIs don’t have to declare their assets abroad. Only resident Indians need to,” she clarified.

Ahuja also explained that the new rule regarding foreign bank account declaration is only applicable to NRIs when they file the tax returns for income and assets in India only if they don’t have an Indian bank account.

“The tax authorities can ask for more details if the tax returns are picked up for audit,” she said.

Anish Mehta, secretary, Institute of Chartered Accountants of India, Dubai, said details of foreign assets and income from any source outside India remain to be declared only by Indian residents.

“Some reports from India have clarified that even foreign bank account details have to be shared only by NRIs who are paying tax for their income from India. They don’t have to share these details if they are providing their bank details in India,” Mehta said.

“I think the new clause was added because some people were not providing their bank details since they did not have accounts in India. Such online applications will be automatically rejected by the system. Returns are not accepted if no bank details are given.”

“Now NRIs [with income and assets in India] will be encouraged to file tax returns. If there is any refund to be claimed, it will be sent to the bank account they provide. Hopefully, this [amendment in the form] will help processing refunds faster.”

No official order

“The most important part is that the income tax return form has been amended without any notification. Things will be clear if the government issues a circular in this regard,” Mehta pointed out.

K.V. Shamsudheen, director of Barjeel Geojit Securities, said that NRIs need to file income tax returns mainly for resident income like rent from their properties, stocks, and fixed income instruments like bank deposits and bonds.

“Some Indian expats are worried that it [amendment to tax return form] is an attempt to tax NRIs on global income. I don’t think so and there is no reason for many expats to worry as only those who have an income of more than Rs250,000 yearly from India need to file tax returns.”

However, he said the move is generally seen as the government’s efforts to track money laundering through foreign accounts.

The Indian Consulate in Dubai said it had not received any specific orders related to these matters.

Dr. Khalid Maniar, managing partner of Crowe Horwath UAE, said misleading information could force the masses to file their tax returns and declare their foreign bank and asset details without the need for it.

“I myself initially thought that now I will have to declare my assets abroad to the Indian government. Since no clarification has come from the government, I suggest people wait for the official notification before taking any action in this regard.”

Source: Gulf News

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