Until acquired from kinfolk, earnings tax may be levied on items

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—Nimesh Srivastav

Capital positive factors from sale of shares of an Indian firm are taxable in India. An individual whose complete taxable earnings in India is lower than Rs2.5 lakh (presently) is just not liable to pay tax. Capital positive factors on sale of fairness shares listed on a recognised inventory change in India can be labeled as long-term if held for greater than 12 months. Lengthy-term capital positive factors (LTCG) from sale of such listed shares are tax exempt supplied the securities transaction tax (STT) has been paid on them. If held for lower than 12 months, their sale will appeal to short-term capital acquire (STCG) tax on the charge of 15%, plus relevant surcharge and schooling cess, supplied STT has been paid. The efficient charge of this tax is, thus, 17.77%.

Revenue tax is levied on any sum of cash, movable property or immovable property acquired by a person with out consideration (i.e., with out a quid professional quo), besides items acquired from a relative. Aside from partner, the time period ‘relative’ consists of: brother or sister, brother or sister of the partner, brother or sister of both of the dad and mom, any lineal ascendant or descendant, any lineal ascendant or descendant of the partner, partner of any of the individual referred to above.

Due to this fact, present of shares to your sister could have no tax implications in India, neither for you nor to your sister. Nevertheless, subsequent sale of shares by your sister can be taxable in India as described above. The price of acquisition of the shares to your sister would be the price at which you’d have bought them.

I’m going to London for a 10-month course. I’ll haven’t any supply of earnings throughout this era. How a lot cash may be remitted to me by my dad and mom throughout this time, and can I be taxed for it?

—Bhaskar Pant

Beneath the Liberalised Remittance Scheme, all resident people are allowed to freely remit as much as $250,000 per monetary yr for transactions specified beneath the scheme. The remittances may be made in any freely convertible overseas forex.

Remitting cash for learning overseas is without doubt one of the permitted transactions beneath the scheme.

Therefore, your dad and mom could remit cash as much as a most of $250,000 if the ten months course runs between April to March. There can be no tax implications for you and your dad and mom in India attributable to it.

I’m an individual of Indian origin (PIO) primarily based within the US. Can I lend cash to my sister in India? What would be the restrict for it and the tax implications on each of us?

—Lakshmi Nair

Sure, you might lend cash to your sister in India and it’ll haven’t any tax implications in India as long as it may be defined as mortgage to a sister.

You might also be aware that beneath the Indian income-tax legal guidelines, there is no such thing as a present tax in India.

Additionally, money items exceeding Rs50,000 are thought of as earnings within the fingers of the recipient, besides if the quantity is acquired from kinfolk or on particular events like marriage or beneath a Will.

Relations, for this goal, embody brothers or sisters of the person. Therefore, a present of cash to your sister in India will even haven’t any tax implication for both of you.

I work at home in India, for a UK-based firm. My wage is credited to an account within the UK in euros, after which transferred to my Indian account. How will I be taxed on my earnings?

—Sayantani Guha

Taxability in India will depend on the next components:

— Supply of earnings

— Residential standing

Any earnings, the supply of which is positioned in India, is taxable in India (regardless of residential standing).

Residential standing is set on the premise of bodily presence of a person in India throughout a monetary yr.

A person with the residential standing of ‘resident and ordinarily resident’ is taxable on her world earnings and required to report these world property in her India tax return.

Nevertheless, a non-resident or ‘resident however not ordinarily resident’ is liable to pay tax solely on India-source earnings.

Wage earnings acquired within the UK, for the interval of employment exercised in India, can be taxed in India because the companies have been rendered in India (regardless of residential standing).

As no India-specific income-tax is withheld by your UK-based employer, you might deposit the tax beneath the advance tax mechanism as per the next schedule:

— 5—% of complete tax by 15 June

— 45% of complete tax by 15 September

— 75% of complete tax by 15 December

— 100% of complete tax by 15 March

You might also deposit tax as self-assessment tax earlier than submitting the income-tax return in India.

Nevertheless, in such case, curiosity for late or non- deposit of advance tax can be relevant. In case of double taxation, applicable profit could also be claimed in India beneath the Double Taxation Avoidance Settlement (DTAA) between India and the UK.

Sonu Iyer, tax associate and other people advisory companies chief, EY India.

Queries and views at mintmoney@livemint.com.

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