Posted on: 21-07-08 20:52:41
Can one explain to me how can one repatriate funds invested in India to Canada ?
What I understand is Capital Gains for NRI's who are residents of Canada get taxed at rates ranging from 20% and above and there is a different rate for long term and short term capital gains.
What I fail to understand is how to I repatriate the amount that I atleast paid for the property out of my NRE account, without bothering to get the capital gains back.
Since NRE accounts cannot take deposits in local currency, how can one repatriate funds back. I have NRO account which can take local currency deposits and I am not clear if you can ask bank to repatriate funds from NRO account to an account in Canada. How then do you show that you not get taxed on that amount since you are repatriating money that you originally paid for from your NRE account.
Also, what if the real estate investment is a joint venture with between an NRI and an Indian resident ? What complications are involved in this case if the property was never registered in the NRI's name, but in a company managed by the resident Indian ?
Quote:
Originally posted by photohobbyst1
Can one explain to me how can one repatriate funds invested in India to Canada ?
What I understand is Capital Gains for NRI's who are residents of Canada get taxed at rates ranging from 20% and above and there is a different rate for long term and short term capital gains.
What I fail to understand is how to I repatriate the amount that I atleast paid for the property out of my NRE account, without bothering to get the capital gains back.
Since NRE accounts cannot take deposits in local currency, how can one repatriate funds back. I have NRO account which can take local currency deposits and I am not clear if you can ask bank to repatriate funds from NRO account to an account in Canada. How then do you show that you not get taxed on that amount since you are repatriating money that you originally paid for from your NRE account.
Also, what if the real estate investment is a joint venture with between an NRI and an Indian resident ? What complications are involved in this case if the property was never registered in the NRI's name, but in a company managed by the resident Indian ?
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I will answer the very last paragraph.
""Also, what if the real estate investment is a joint venture with between an NRI and an Indian resident ? What complications are involved in this case if the property was never registered in the NRI's name, but in a company managed by the resident Indian ?""
If the initial deposit to the NRE account was from abroad, which it was, you have proof of the initial deposit there in India. The money if it was deposited from your NRE account into your NRO account, then you have the transaction details. Or if it was given to the Realtor for the purchase of the house, by you, then there should be proof of the same with a canceled cheque. But if it was loaned to some one, in this case your friend, then if there is proof of it, and if your friend will return the funds back to you to deposit to your account, then, collect the same and take it back into the NRO account. ONLY the SUM that you LOANED initially.
If you have proof, with canceled cheques etc., to show that the money in your NRO account was from out side of India and it was advanced to a partnership, that is registered in India, and you both are in business together, then go and see an accountant there and get all of these details legalized, audited and certified.
That should bring it back on course.
If at any time you would like to repatriate your initial sum, then go and see the banker with whom you are dealing with, and get your audited statements for him and get the same back to where you are currently residing.
The rest of the questions you have raised, will be time consuming to respond with. If you have not done that prior to getting into investments in India, it is time that you take a break and study it. It will be worth your while, since you are invested in there and need some professional help in resolving your current dilemma.
Good luck with the initial investment and see if you can bring it back.
Hope this helps you a little.
Freddie.
http://www.hindu.com/thehindu/2002/06/01/stories/2002060102141300.htm
Thanks Freddie for your reply.
I can find an accountant only if I can find one that knows the tax laws both in India and Canada. And I don't even know where to look.
I have not invested in Real Estate in India yet, but planning to, hence these questions, so no I am not in the wrong course yet, just learning what to expect on the course before I dive in.
All that i have merely done is loaned some money to resident Indian from my NRE account and will be getting that back, so looks like it is easy to repatriate that back even from an NRO account, if I can show the trail that it was originally paid out of my NRE account.
You are right photohobbyst1, if you can show the origin of the fund, you can have your bank debit your NRO account (INR) and credit your NRE account with CAD without any tax implication... You will however have to complete some formalities as suggested ftfl. Your accountant in India can give you more info on formalities required..
As for the Capital gain portion of the deal, I am sure you are aware that you can avoid having to pay taxes on even that if you invest the capital gain portion in any residential property (if you dont own any other residential property in India) or some other registered funds...
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Vik
