My spouse and I are each NRIs. She owns a residential property in India which she has rented out. She requested the tenant to credit score one month’s hire into my NRO account as an alternative of hers since I’m because of go to India shortly and may use these funds for native bills. The resident tenant deducted TDS beneath my spouse’s PAN and transferred the hire to my NRO account. Will I be taxed on this quantity since I’ve acquired it in my NRO account?
– Name withheld on request
From an revenue tax perspective, the rental revenue belongs to your spouse since she is the authorized proprietor of the property. She is answerable for reporting this revenue in her tax return, and the truth that the fee was made into another person’s account doesn’t change this. Furthermore, the tenant has deducted TDS on the hire utilizing her PAN, appropriately assigning the revenue to her.
Since the rental revenue is your partner’s, it can’t be taxed in your arms just because the hire fee was credited to your NRO account.
Note that beneath FEMA rules, it’s not advisable to obtain hire funds in your NRO account. It might quantity to a violation because the hire belongs to your partner. To keep away from potential points beneath FEMA, future hire funds needs to be directed to your partner’s NRO account. This can even assist streamline accounting and cut back the probability of misattributing revenue.
I’ve earned capital positive aspects of ₹54,00,000 upon exiting a startup after about 4 years. This might be the one revenue I’ll have in FY25. What are the tax implications?
– Name withheld on request
Since you could have held the unlisted shares for about 4 years, the positive aspects qualify as long-term capital positive aspects as they exceed the required holding interval of 24 months.
Through the Finance (No. 2) Act, 2024, the tax on long-term capital positive aspects earned from the sale of unlisted shares has been elevated from 10% to 12.5% (plus surcharge and cess). You might look at the suitable Double Taxation Avoidance Agreement (DTAA) to verify if it has extra useful provisions.
It’s essential to notice that NRIs don’t obtain the fundamental exemption restrict for long-term capital positive aspects that’s out there to resident particular person taxpayers, no matter whether or not they select the previous or new tax regime.
Harshal Bhuta, companion, PR Bhuta & Co.
