India tax investment independently

india tax investment independently

Additionally, payees should know that the Indian Finance Ministry actively seeks to identify PAN holders who have not filed income tax returns in order to ensure that they are complying with Indian tax law.

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Also if the bonds are sold before maturity it entails capital gains tax.Know about the latest issues of Sovereign Gold Bonds

Sovereign Gold Bonds are one of the better ways to invest in gold. It’s safe, backed by government of India and you need not be worried about purity of gold or storage. The icing on the cake is you get interest paid on your investment.
You can buy these Sovereign Gold Bonds from NSE/BSE but the liquidity is a problem. So it’s a good idea to subscribe to latest issue of Sovereign Gold Bonds which comes almost every month.

Gold Monetization Scheme

The interest received is tax free. Also there is No Capital Gains Tax on the appreciation in the value of gold deposited.


Thankfully there is NO inheritance tax in India.

To play safe there are times when employers do not accept proofs even though it’s legal. Consultant do not this issue. They are responsible for their tax deductions.

5. Presumptive Taxation

Professionals who are covered under presumptive taxation can lower their tax outgo substantially as they just need to state 50% of their gross receipts as income. However they cannot take any other business expense deduction.

Download: Excel based Income Tax Calculator for FY 2019-20 [AY 2020-21]

Here are the rules for Presumptive Taxation:

  1. Presumptive Taxation for professionals was introduced in Budget 2016 under a separate section 44ADA.
  2. Under this scheme the income is presumed to be 50% of the gross receipts.


Gifts received from relatives are tax free u/s 56(2) without any upper limit. Also gifts up to Rs 50,000 from non-relatives are tax exempted and hence tax free income. The good this is all gifts received at the time of marriage from relatives or non-relatives are fully exempted from tax. Following are considered relatives as per income tax laws:

  • Spouse of Individual
  • Brother or sister of Individual
  • Brother or sister of spouse of Individual
  • Brother or sister of either of parents of Individual
  • Any lineal ascendant or descendant of Individual
  • Any lineal ascendant or descendant of spouse of Individual
  • Spouse of person referred to in clauses above

How to generate Regular Monthly Income?

There can be several situations when we look for regular income.

The taxpayer should determine residential status based on the number of days of their stay in India during the financial year and in the previous years too. Below is the tax treatment of income from foreign investments based on the residential status:Residential StatusMeaningTax TreatmentResident in IndiaResident and Ordinarily Resident (ROR)Global Income taxable in IndiaNot Ordinary ResidentResident but Not Ordinarily Resident (RNOR)* Taxable if foreign income is received in India * Taxable if foreign income is accrued in India from a business or profession controlled in IndiaNon ResidentNon-Resident in India (NRI)

Income Heads for Trading in Foreign Shares

Capital Gains Income from Foreign Shares

Income from the sale of foreign shares is a Capital Gains Income as per the Income Tax Act.

The clarification, which also says that infrastructure costs for mining cryptocurrency cannot be seen as cost of acquisition, comes less than two weeks before the proposed crypto taxation law is set to go into effect (April 1).

The crypto community in India aired its shock at the announcement, with several founders expressing their disappointment.

Ashish Singhal, co-founder and chief executive of Andreessen Horowitz-backed CoinSwitch Kuber, said Monday’s move is “detrimental for India’s crypto industry and the millions who have invested in this emerging asset class.”

Singhal cautioned that such a step could drive users to underground peer-to-peer markets, where users are not required to confirm their real identity, hence defeating the purpose of the tax.

The federal budget from earlier this year “recognised virtual digital assets (VDAs) as an emerging asset class.

Scholarships 11. Awards by Government 12. Government Relief Funds 13. Gifts from relatives & Gifts up to Rs 50,000 from non-relatives

✅ What is Best Tax Free Investments in India?

Following is the list of Tax Free Investments in India: 1. Interest received on Tax Free Bonds 2. Interest on Saving Account up to Rs 10,000 3.
Interest on NRE Accounts 4. Interest on Fixed Deposit for Senior Citizens up to Rs 50,000 5. Employee/Voluntary Provident Fund for contribution up to Rs 2.5 Lakhs 6. Public Provident Fund 7. Sukanya Samriddhi Account 8.
Life insurance policy Maturity Amount 9. Long Term Capital Gains on Stocks & Equity Mutual Funds up to Rs 1 Lakh 10. Long Term Capital Gains on Sovereign Gold Bonds 11.

  • Non-residents with a permanent establishment in India;
  • Non-residents wishing to claim a refund of tax withheld in India;
  • Non-resident investors (i.e., foreign institutional investors) earning India-source income such as interest and capital gains;
  • Non-residents receiving India-source royalties or fees for technical services;
  • Non-residents deriving capital gains from the sale or transfer of Indian assets;
  • Non-residents engaged in offshore transactions involving a transfer of shares in an Indian company;
  • Non-residents earning any kind of India-source income.

In each of these circumstances, companies making payments to non-residents must withhold income tax from the payment either at the time when the income is credited to the account of the payee or at the time of payment in cash, check, or bank draft, whichever is earlier.

The Income Tax Act provides the rates of withholding. In general, the current withholding rates are:RELATED: Accounting and Reporting ServicesPayee

Non-resident individuals and companies are subject to withholding tax on income that arises or accrues or is deemed to arise or accrue in India, or income that is received or deemed to be received in India. Individuals and companies who receive Indian-sourced income are considered to be payees.

All of the circumstances outlined above which require payers to withhold tax also require the non-resident payee to file an Indian tax return.

It is important to note that the payee must file an Indian tax return regardless of whether the payee is entitled to the benefits of a tax treaty and/or has zero tax liability. In the past, the Tax Authority did not require return filing if the concerned income was not taxable in India.

Non-senior citizens and HUFs are not eligible for 80TTB exemption.Senior Citizens’ Savings Scheme: An Excellent Investment

Senior Citizens’ Savings Scheme or SCSS is an excellent investment for senior citizens for regular income and tax saving u/s 80C. It is 100% safe as its backed bu Government of India, the interest paid is generally higher than bank fixed deposits and the investment is eligible for tax saving u/s 80C. We explain the eligibility, process and do’s & don’ts of SCSS in this post.

EPF/VPF (Employee/Voluntary Provident Fund)

The EPF is tax free if it’s withdrawn after 5 years of continuous service.

In case withdrawal happens before 5 years, it’s fully taxable.

However, the burden is now on the payee to demonstrate to the Tax Authority that it is eligible for treaty benefits, and in most cases, this will require filing a return. Some payees have the misguided impression that they only have to file a return if they have a permanent establishment in India; but, even if the India-sourced income is exempt from tax under a tax treaty, or if the Indian payer has already withheld the tax, the payee must still file an Indian income tax return.

Non-residents can choose to be governed by Indian tax law or by the provisions of an applicable tax treaty. In order to be governed by an applicable tax treaty, non-residents must file a Form 13, “Application by a person for a certificate for no deduction/collection of tax or deduction/collection of tax at a lower rate” if seeking approval for withholding at lower rates.

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