Can overseas investors remit Indian taxes without an Indian bank account?
-Name withheld on request
When you sell shares of an Indian company, any income arising from such a transfer is subject to capital gains tax in India. In cases where tax has not been deducted at source (TDS) by the purchaser, the onus is on you, as the taxpayer, to discharge the tax liability by paying the applicable amount as self-assessment tax, prior to filing your income tax return.
Even if you do not have a bank account in India, you can still make the tax payment from abroad. Several Indian banks facilitate this process by allowing remittance of tax payments from your overseas bank account into their designated Nostro accounts. To initiate this, you are required to download and complete a mandate form available under the 'e-Pay Tax' section on the Income Tax Department's website, and submit it to the bank through which the payment is being made.
Upon receipt of funds, the bank will process the tax payment and issue a Unique Transaction Reference (UTR) number. The corresponding tax challan will be reflected under the 'Payment History' tab in the 'e-Pay Tax' section of the income tax portal. Once available, you may download the challan and proceed to file your income tax return, ensuring the challan details are correctly reported in the return.
Can you please confirm whether interest on fixed deposit opened in Gift City is exempt similar to FCNR deposit? I got to know that FD in Gift City starts with seven days instead of minimum one year for FCNR in India.
-Name withheld on request
Under Indian income tax law, interest earned on deposits maintained with an IFSC Banking Unit (IBU) is exempt from tax for non-residents. The CBDT has also clarified that IBUs are not required to deduct tax at source (TDS) on interest paid to non-residents on such deposits.
Moreover, if the interest from your IBU deposit in GIFT City is your only income earned in India and you have no other income chargeable to tax in the country, you are not required to file an Indian income tax return.
Harshal Bhuta is partner at P. R. Bhuta & Co. CAs
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