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17 10, 2019

Top #5 Income tax implication on inheritance for NRI’s in Australia

By |2019-11-04T11:29:37+00:00October 17th, 2019|Australian Taxes, income tax, NRI, tax deductions, tax exempt, tax filling, Tax implication, Taxes|0 Comments

An NRI in Australia is eligible to inherit a property in India and this property can be residential, commercial, agricultural land or even farmland. Income tax implication An Australian NRI can inherit property in India from the below -mentioned categories.

  1. From a person who is resident in India
  2. From a person who is resident outside India

It is necessary that the person from whom the inheritance of property is been taking place has acquired the property as per the FEMA (Foreign Exchange Management Act) or the laws of the Foreign Exchange.

Inheritance of property in India is a situation that does not arise out of choice of the inheritor. So, it is inevitable for the inheritor to know about the tax implications on the inherited property.

Tax implications on inherited property for Australian NRIs

1.Wealth Tax

At the time of inheritance of the property, there is no requirement for the payment of Income Tax.  But, there can be certain cases in which the inheritor of the property might have to pay Wealth Tax for the property. An NRI in Australia is required to pay a wealth Tax if his asset’s net value is more than Rs. 30 lakhs. The Wealth Tax will be levied at the rate of 1% of the amount which is more than Rs. 30 lakhs.

The asset can be a single residential house owned by the NRI in India.  In this case, if the inheritor owns this single house as the only asset in India then he is not required to pay any Wealth Tax according to Section 5 of the Wealth Tax Act. Moreover, if an NRI in Australia has given his inherited residential property in India for rent for more than 300 days then there will be no Wealth Tax levied.

2.Rental Income from Inherited property

An Australian NRI can rent out his property in India and this rental income is transferred to the NRE or NRO Account of the NRI. Since the rental income is earned in India, the NRI in Australia has to pay tax on this income. The rent payer deducts this tax from the rent by obtaining a TAN will deduct the TDS (Tax deducted at Source). The TDS deducted is at the rate of 30% from the amount to be paid as rent.

The rental income will also be subject to taxation in Australia as well. The resident has to declare the rental income Australia while filing for the Income-tax returns. The resident will be able to claim credit for the taxes he has paid in India.

3.Sell of Inherited property

An NRI in Australia is eligible to sell his inherited property to either an Indian resident or an NRI in a different country or a PIO (Person of Indian Origin). In the case of the NRI willing to sell an agricultural land of the farm, he can sell this to only an Indian resident.

If the property is being sold after 3 years of the inheritance of property, then it is considered to be a long-term capital gain and the NRI has to pay a tax of 20% of the amount of the long-term capital gain. However, if the property is being sold before 3 years of inheritance of the property then it is considered to be a short-term capital gain and the NRI will be liable for the payment of a tax based on his income tax slab.

 4.Repatriation

In the case of Indian property inherited by an NRI in Australia, permission is available for the NRI to repatriate the proceedings of sale of the property.  The amount of repatriation should not be more than $ 1million in each financial year.  For this repatriation, the NRI must be able to produce documentary evidence which should support the inheritance. The proceeding of the repatriation has to be credited into the NRO Account.

5.Tax Exemption

If an NRI in Australia is selling his inherited property in India, then he is eligible to avail tax exemptions according to Section 54, 54EC and 54F of the Income Tax Act,1 961.

Under Section 54/54EC/54Fof the Income Tax Act, 1961 an Australian NRI can claim tax exemption if the capital gains are invested further. If an NRI in Australia is making an investment into a residential property, he can claim the tax exemption under Section 54 and Section 54F. To claim an exemption under Section 54EC, the NRI has to make the investment in NHAI bonds or REC bonds.

Hence, the tax implications associated with the inheritance of property by NRIs in Australia are quite simple. NRIs in Australia inheriting properties in India should know in detail about these implications and make tax payments accordingly.

11 10, 2019

Social Security in Australia for NRI’s in Australia

By |2019-11-01T10:54:16+00:00October 11th, 2019|income tax, tax filling, tax return, Taxes|0 Comments

A new social security agreement has been signed between India and Australia which would result in a boost of the bilateral business relations between both the nations. According to this agreement, people of both countries would be able to enjoy the benefits of retirement in each other’s nations. This agreement between both nations has been signed in November 2014 and has been operational since 1st January 2016.

This social security agreement will encourage an increased number of people‘s movement between India and Australia. When people are ensured that their pension rights are safe in both countries, they will think about more movement and this will improve the business relations between both the nations.

Salient features of the Social security agreement

Let us know about some of the major features of the new social security agreement between India and Australia.

According to the provisions of the Social Security Agreement, both the nations will be equally sharing the responsibilities of pension for those people who are not entitled to this due to lack of sufficient Australian residence or sufficient Indian insurance time period. There are many such people in both nations who are unable to claim their pensions as they stay abroad.  However, with this agreement, those Australian residents who are residing in India can avail the benefits of the Australian Age Pension without the need to return from India. Moreover, Indian residents who are staying in Australia can also access the pension facilities associated with the Indian Retirement System. The Indian residents living in Australia can avail the benefits under the old age and survivor’s pension and the pension for permanent total disability.

With this new social security agreement, there would be a significant reduction in the business cost which is operating in both the countries.The employees who have been seconded to both the nations and their employers will only have to contribute as per the laws of their own nation rather than contributing according to the laws of other nations as well.

Australian pension system for a person residing in Australia

According to Australia’s social security system, all the residents who are claiming for the Australian Age Pension meet the minimum age and residence criteria. For the claimants of the Australian pension, income tests and asset tests are carried away. Out of these tests, whichever results in a lower pension rate is used for this assessment procedure.

In case of minimum eligibility for the Australian Age Pension, the person claiming should have stayed in Australia for a minimum of 10 years. In case a person has stayed in Australia for less than 10 years and has AWLR of at least 12 months before the acquisition of the Indian Pension Age, then he can count the insurance periods needed for Indian insurance to cope up with these requirements. During this time period i.e. until the individual has acquired 10 years of residence in Australia, the individual will be obtaining the normal income and also the pension rate which is asset tested and is less than the amount received in terms of any Indian pension.  The insurance periods which have been in India and after 1st January 2016 will be counted in this case.

Documents needed to make the pension claim

When an individual is staying in Australia and is a claimant of the Australian pension, he should complete a claim form and provide those documents which are necessary to prove the identity and residence period in Australia.

In the case of an individual who is staying in India and claiming the Australian pension, he needs to provide proof of the previous residence in Australia and also need to prove his identity.

Hence, by the social security agreement, it has become quite easier for the residents of both the nations in availing the benefits of retirement. In case of any issues or queries related to pension, the individual can fill claim and complain about any of these two nations

4 10, 2019

Is Advance Tax applicable for NRIs in Australia?

By |2019-11-01T07:36:32+00:00October 4th, 2019|Advance tax, Australian Taxes, income tax, NRI, Tax liability|0 Comments

What is Advance Tax?

In general terms, Advance Tax is the payment made by an individual in advance instead of doing the payment in a lump sum at year-end. It is the process by which an individual makes an estimation of his total taxable income in a year and also a calculation of the income tax that needs to be paid for that particular year.  Moreover, Advance tax is also known as ‘pay as you earn’ tax. The Advance payment system is advantageous for the Government as there will be a continuous receipt of tax and flow of income over the year rather than waiting for the year-end.

Who should pay Advance Tax?

In the case of the total tax liability of an individual is more than Rs. 10,000 in a financial year, there is a need for payment of Advance Tax by the individual.

Advance tax needs to be paid by salaried employees, businessmen, and even self-employed professionals. Even if the individual is making income from sources such as capital gains on shares, fixed deposit interest, lottery winnings, capital gains on residential property, etc.  Senior citizens i.e. who are above the age of 60 years and have do not earn any income from business are exempted from paying Advance Tax.

Usually, Advance tax is paid in installments and some individuals select presumptive taxation. According to the provisions under Section 44AD, those individuals who have selected the option of presumptive taxation need to pay the entire Advance tax in one installment. Self-employed professionals such as lawyers, doctors, etc. also fall under this category of taxpayers.

Advance Tax payment rules for NRIs in Australia

As said earlier, any individual who is having an estimated tax liability of more than Rs. 10,000 in a financial year is abided to pay Advance tax. There are no special provisions related to payment of Advance Tax by NRIs in Australia and needs to be paid as per specific guidelines.

NRIs in Australia are taxed based on two categories i.e.

1.Income which has to be received or is deemed to be received in India.

2. Income accrued in India or is deemed to be accrued in India.

NRIs in Australia who have an estimated tax liability of Rs. 10,000 or more on the income received under any of the two categories mentioned above need to pay Advance tax in India. The Advance tax payment by the NRIs in Australia has to be done in installments and within the stipulated timelines specified by the Income Tax Department of India.

We can have a list of the due date specified for the payment of the Advance Tax installments by an NRI in Australia.

Due Date Payable Advance Tax
By 15th June 15% of the Advance Tax
By 15th September 45% of the Advance Tax less the Advance Tax that has been paid already
By 15th December 75% of the Advance Tax less the Advance Tax that has been paid already
By 15th March 100% of the Advance Tax less the Advance Tax that has been already paid

Non-payment of Advance Tax by NRI in Australia

Non-payment of Advance Tax by NRIs is treated very seriously by the Income Tax Department of India.  The NRIs in Australia are penalized under Section 234B and 234C of the Income Tax Act, 1961.

Under Section 234B of the Income Tax Act, 1961 the NRI who has not paid the Advance Tax will have to pay interest. This interest is calculated at 1% on the Assessed Tax minus the Advance Tax. An NRI has to pay this interest if he is liable to pay Advance Tax and has not paid it or if the paid amount is less than 90% of the ‘assessed tax’.

Similarly, under Section 234C of the Income-tax Act, 1961 the interest is calculated at 1% on the amount of Advance tax to be paid minus the Advance Tax that has already been paid by the NRI. The penalty under Section 234C is applicable for those NRIs who have not opted for the presumptive income under Section 44AD.

Hence, the applicability of the Advance Tax is valid for both the residents and the non-residents of the country. It is advisable for both the residents and non-residents to pay their Advance Tax by the due date to avoid being penalized.

27 09, 2019

How NRIs in Australia can Claim Benefits under DTAA for salary received in India?

By |2019-11-01T07:59:31+00:00September 27th, 2019|Australian Taxes, income tax, NRI, tax credit, tax exemption, tax filling, tax refund, Taxes|0 Comments

DTAA (Double Tax Avoidance Agreement) can be defined as a treaty that is signed between two nations. The major intent for signing this treaty between two nations is to make effective provisions by which NRIs would not be paying tax twice for the same income earned.

Usually, there are many NRIs who live abroad and earn their income in India. In these cases,it is mostly seen that the NRI needs to pay tax in India as well as in the country of residence for the single income earned in India.  This implies there is a payment of tax twice for the same income which is earned in India. This can be avoided by the DTAA which helps the NRIs in cutting down the tax liabilities for the income earned in India.

India has signed a DTAA with Australia and thus, NRIs in Australia can avail the benefits under DTAA for their income earned back in India.

Categories of income under DTAA

Let us check out those categories of income which come under the DTAA.

  1. Salary that has been received in India.
  2. Residential property located in India.
  3. Services that have been provided in India.
  4. Fixed deposits in India.
  5. Capital gains by the transfer of assets in India.
  6. Savings bank account in India.

In case of income obtained from these sources being taxable in Australia, NRIs are eligible to avoid paying taxes in India under the DTAA.

Methods of DTAA

 There are mainly 2 methods by which benefits under DTAA can be claimed.

  • Tax Credit Method

By the tax credit method, the income earned in India will be taxed in both the countries i.e. India and Australia. However, tax relief can be claimed in the form of tax credit in the country of residence.

  • Tax Exemption Method

By the tax exemption method, if the income which is earned in India and taxed in India will be tax exempted in Australia.

Methods of benefit claim by NRIs in Australia on income earned in India

Let us illustrate the tax benefits availed by NRIs in Australia under the DTAA for the income received in India.

For example, Mr. Rohit is an NRI residing in Australia and earns income by his NRO account active in India. Let us assume the income earned is Rs. 1, 00,000 and let the tax rate on the income is 20% according to the Australian tax laws. According to the terms and conditions of the DTAA, the tax rate is 15% in India.  Australian tax laws have the provision of providing credit for the tax that has been paid in India.

The taxation scenario can be represented by the below-mentioned table.

Income Earned Rs. 1,00,000
Tax to be paid in India as per DTAA treaty Rs. 15,000
Tax to be paid in Australia Rs. 20,000
Less: The credit for the Indian tax paid Rs. 15,000
Tax payable in Australia Rs. 5000

As said earlier, the tax benefits under DTAA can be claimed by two methods i.e. tax exemption method and tax credit method.

  1. Under the rules of tax exemption method, either of the state i.e. India or Australia has got the right to levy a tax on the income which is arising in India. But, in case of an Australian national residing in India would be tax exempted from paying taxes in India on the basis of a tie-breaker clause. In such a case, the Australian national will not have to pay any tax for income earned in Australia if he would submit a Tax residency certificate along with some necessary information.
  2. By the tax credit method, the Indian national who is residing in Australia will be taxed both in India and Australia for his income. But, he will be receiving tax credit in India for the tax paid in Australia for the single income.

Hence, by international treaties such as DTAA, the Governments of both nations have taken initiatives for improving the business relationships between the nations and making the destinations financially attractive for people.

20 09, 2019

All you need to know about Income Tax norms on real estate in India for NRI’s in Australia

By |2019-11-01T07:17:55+00:00September 20th, 2019|Australian Taxes, DTAA, income tax, tax return, Taxes|0 Comments

With a drop in the value of Indian rupee, NRIs are finding investment into Indian real estate highly profitable. Income Tax norms on real estate in India for NRI’s in Australia. Mostly NRIs from the Middle East, Australia and Singapore are seen investing in the real estate market of India. Several market studies have revealed the trend of Australian NRIs investing a substantial amount into Indian real estate especially into residential properties due to the attractive valuation and the scope of capital appreciation present in the sector. Many Australian NRIs are also interested in selling their properties in India to avail the benefit of the hike in land prices. However, it is important for the NRIs to know about the tax implications associated with the buying and selling of properties in India.

Categories of properties in which Australian NRIs can invest

As per RBI regulations, NRIs in Australia can acquire immovable properties in India. But, there are certain exceptions to this as well. NRIs in Australia can purchase only residential or commercial property. It is not permissible for them to purchase any agricultural land or property meant for plantation except in cases of inheritance or gift to the NRI. The Acquisition of farmhouse property in India by Australian NRIs is also not permissible. However, there is no restriction on an Australian NRI purchasing several residential or commercial properties in India.

Tax provisions for Income earned from real estate for Australian NRIs

While an Australian NRI is investing in Indian real estate, his origin is to be determined according to FEMA (Foreign Exchange Management Act) but his tax liabilities will be determined as per the definition of the Income Tax Act.

Capital Gains

An NRI in Australia is liable to pay tax on the amount of capital gain which arises in India. An immovable property that is held by an individual for a period of more than 24 months is considered to be a long-term capital asset.  Long term capital gains for Australian NRIs are taxable at 20% and the short term capital gains are taxable at the Income-tax rate which is applicable for an NRI.

Double Taxation Avoidance Agreement (DTAA)

According to the DTAA, an NRI in Australia is eligible to claim a tax credit for the taxes he has paid on the income earned from any immovable property possessed in his own country of residence.

Rental Income

NRIs in Australia have to pay Income tax on the rental income they earn from property possessed in India. The taxability of the rental income is calculated after deducting the below-mentioned taxes.

  1. Taxes for the Municipal Corporation
  2. Standard deduction at 30%
  3. Any interest which is paid on a loan taken for the acquisition or construction purpose

Tax withholding

Tenants can withhold tax from rental income of an NRI or the capital gains in case of sale of the property. Tax withholding is done at a rate of 20% if the property is held for more than 24 months or at a rate of 30% in other cases. The rate of tax withholding depends on the amount of capital gain obtained.

Capital gain exemption

Under Section 54/54EC/54Fof the Income Tax Act, 1961 an Australian NRI can claim tax exemption if the capital gains are invested further. If an NRI in Australia is investing in a residential property, he can claim the tax exemption under Section 54 and Section 54F. To claim an exemption under Section 54EC, the NRI has to invest in NHAI bonds or REC bonds.

Income tax return

NRIs in Australia are required to file Income tax returns if the total taxable income of the NRI is more than Rs. 2, 50,000. Moreover, even if the total taxable income of the NRI does not exceed Rs. 2, 50,000 but his income consists of rental income and tax deduction has already been done from the rental income then he should file the Income Tax return.

Permissible deductions

Under Section 80C to Section 80TTA of the Income Tax Act, 1961 an NRI in Australia is eligible to claim the tax deductions.

Hence, NRIs in Australia should very clearly understand the provisions associated with the taxation of the real estate in India and make their investments accordingly.

 

13 09, 2019

How to process your tax refunds for expats in Australia?

By |2019-11-01T07:39:19+00:00September 13th, 2019|Australian Taxes, income tax, tax filling, tax rates, tax refund, tax savings, Taxes|0 Comments

How to process your tax refunds for expats in Australia?

There are a lot of things about Australia that will make you fall in love with the country. The amazing beaches, lovely weather and very friendly culture are some of the more prominent reasons. Tax refunds and the fact that more than one fifth of the entire population of the country was born outside makes it an easy pick.

If you are an expat, being aware of the tax system will make the transition a little bit easier for you. The Australian tax year runs from the 1st of July to the 30th of June. And if you follow some straight forward steps, you will not be in a frenzy when it comes to filing your returns or even getting your tax refunds.

First Things First

Thanks to the process improvements and a sturdy system in place by the Australian Taxation Office (ATO), filing your returns and getting your tax refunds is easier than you might have thought. The first step is to ensure that you have a tax file number. This nine-digit unique number is provided by the ATO.

Once you have your hands on the unique tax file number, understanding your residential status and tax rates is important. The tax rates for the current fiscal year for an individual is as follows.

Taxable Income Taxes
Up to $18,200 Nil
$18,200 – $37,000 19c for amount exceeding $18,200
$37,001 – $90,000 $3,572 + 32.5c for amount exceeding $37,000
$90,001 – $180,000 $20,979 + 37c for amount exceeding $90,000
Above $180,000 $54,097+ 45c for amount exceeding $180,000

All the countries that levy taxes require you to file your tax returns. It is no different with Australia. However, foreign residents are subject to higher tax rates than residents of the country. In the event that you become a resident, the chances are high that you would have paid higher taxes. Staying in Australia for more than 183 days during a fiscal year, deems you are a resident of the country for tax purposes.

On filing your tax returns, you will be able to find out the amount of tax refunds that you can expect. The tax returns depend on a variety of factors and the ATO has the final call on the same. After filing your returns, you don’t have to take any more actions from your end. You must now wait for the refund to be processed.

Tax Refunds

The duration taken by the ATO in processing a tax refund depends on quite a few factors. The type of filing that you have opted for plays a crucial role in the refund process. A taxpayer who has opted to file the return electronically, can expect the tax refund to be processed within two weeks. However, taxpayers who have opted for manual tax filing might have to wait up to 10 weeks.

The ATO would first access your tax return and intimate you whether you can expect a tax refund or might have to pay additional taxes depending on your returns. The ATO usually sends an email or SMS to intimate the same.

You can also check the status of your tax return online only by entering your tax file number. The ATO website will provide you with various statuses, indicating which phase your return is in. The tax return statuses are, In Progress – processing, In Progress – pending information, In Progress – under review, cancelled, In Progress – balancing amount, Issued – Amount.

After filing your returns, there isn’t much that you need to do as far as tax returns are concerned. You must wait for the ATO to process your refunds, which is usually quick.

3 09, 2019

Income Tax Planning for an NRI in Australia planning to return to India

By |2019-11-01T07:44:45+00:00September 3rd, 2019|Australian Taxes, Financial, ITA, tax benefits, tax refund, Taxes|0 Comments

tax planning

The process of NRIs returning to India can be marred with the tax implications and actions required on your part. However, a proper plan of action can ensure that the transition is smooth, and you don’t have to worry much about it. Apart from the obvious logistical arrangements, you would also need to look into your finances and spend some time on income tax planning beforehand.

When it comes to taxation, the rules are a bit on the generous side for NRIs. To avoid any unwanted run-ins with the income tax department here is all that you need to be aware of.

Taxation Bodies

When it comes to NRIs, there are two tax bodies that you should be aware of. The FEMA or Foreign Exchange Management Act and the ITA or Income Tax Act. It is essential that you know what these two bodies are for. The FEMA outlines all the instruments that you can invest your money in. The ITA, on the other hand, regulates the taxes on all your investments.

Residential Status

Your residential status plays an important role in deciding the income tax slab and other income tax related implications. Both bodies have different outlines to define the residential status of an individual. The FEMA looks into the intent of an individual whereas the ITA has the number of days present in India scrutiny. You can either be a Resident Indian, a Non-Resident Indian or Resident but Not-Ordinarily Resident.

Tax Benefits

NRIs have access to several tax benefits when compared to residents. RNORs can claim some of their foreign income to be excluded from being taxed in India. Income such as capital gains made on buying or selling of properties, rent earned, interests or dividends earned from foreign investments etc.

Tax Liabilities

For instance, if you are a resident of India, your global income will be taxed in India. However, for RNORs the income generated only in India will be taxed and not the global income. RNORs can hold on to their status up to 3 fiscal years after they return to India. Should your income in another country already be taxed, you can get tax credits via the DTAA or Double Taxation Avoidance Agreement.

Financial Assets and Bank Accounts

On returning to India, you would have to take a call on your bank accounts as well. You can either continue with your overseas accounts or choose to close them. In India, NRIs have the option to open an NRE or Non-Residential External account, an NRO or Non-Residential Ordinary account and FCNR or Foreign Currency Non-Resident account.

When you do return to India, your NRO account can be easily converted into a resident account. You can choose to keep your foreign currency likewise without having to convert them into INR. For that, you can open an RFC or Resident Foreign Currency account and transfer your funds from NRE and FCNR account to it.

Other existing financial assets might also need necessary tweaks. Some of the most common investments include Mutual funds, NRI investments etc. For mutual funds, your NRI demat account must be converted into a resident demat account. For other mid term or long-term investments, you can continue with your FCNR which can later be converted into RFC account. For any assets that you hold overseas, you can either choose to hold it or sell them before moving back to India. In such a case, you can sell the asset and remit the amount.

These are some of the major points you need to keep in mind, from taxes point of view, when you plan to shift to India.

26 08, 2019

Top #5 Tips to stay fit and save your money

By |2019-11-01T07:45:22+00:00August 26th, 2019|Australian Taxes, income tax, tax filling, tax return, tax savings|0 Comments

tax tips

Australia is one of the most popular destinations across the globe. It should not come as a surprise that the cost of living is a bit on the higher side in Australia. In fact, it might seem a bit expensive at first. And the several reports, when it comes to the cost of living put Australia as one of the most expensive places to live in.Does this mean that you should reconsider your decision about moving to Australia? You surely wouldn’t want to miss out on the vibrant culture, amazing beaches and good food. As is the case with any other place, a few tax tips and tricks can help you save considerably. For example, living in hotels is not all that practical for a longer duration. Moving to a place of your own can help you cut down on travel expenses as well as accommodation. Here are the top 5 tips to stay fit and save money in Australia.

1.Rent A Place

While it comes down to personal preference, on the kind of house you want to rent, but you can save substantially on that front. If you want to stay in a beachside suburb, Bondi beach isn’t the only place to be. No surprises there, that it is expensive. You can look for alternative beach suburbs which are light on your pockets.

Beaches aren’t your only option. You can look beyond beaches and explore some cities such as Newcastle, Darwin, Adelaide etc. These cities not only provide you with enough vibrant lifestyles but do not poke a big hole in your pockets while doing so. Choosing the right place is one of the first places to start saving money.

2.Switch To A Bike

Driving around in a car can be cool and worth experiencing but they do their share of eating away your savings. If you can, swap your car for a bike and ride it to your office or college. The maintenance and running costs of a bike are much lower than a car. And the icing on the cake being, you stay fit and healthy when you adopt biking. With biking, you can contribute your share to keeping the environment pollution free.

3.Revamp Your Bills

You monthly necessity bills can add up a lot if you do not shop around carefully. Electricity expenses, phone bills, internet bills etc. are prime examples of the same. instead of opting for the most popular vendor, it is recommended that you shop around a bit before finalizing. There are a lot of companies out there, who offer cost-effective solutions for the necessities mentioned above.

4.Prepare A Budget

This is an age-old trick but works like a charm even today. When you have a budget, you would think twice before making certain unwanted expenses. There are a lot of smart budgeting apps these days, which can make it even easier for you. Go ahead and download a budgeting app and start saving money.

5.Lookout For Sales

A calendar year offers plenty of reasons and occasions when vendors offer sales. The end of season sales, Black Friday sales,Boxing Day sales, Cyber Monday sales etc. are great times to stock up. You can get great deals on fashion, electronics and even homewares. Buying your certain essentials during this duration will help you save.

Saving money is Australia is no different from other countries. Keeping a tab on your expenses and putting certain checks will help you keep your expenses down. Following the above tips will provide you with ample opportunities to save money.

17 08, 2019

Top #10 reasons to file your taxes every year as an NRI in Australia

By |2019-11-01T07:46:14+00:00August 17th, 2019|Australian Taxes, Financial, income tax, tax agent, tax filling, tax return, Taxes|0 Comments

Australia, just like several other countries, expects you to pay taxes on your income in the country. And this is irrespective of whether you are a resident, expat, student or have come for a short duration. As long as you earn money and it is above the minimum threshold set by the ATO, you are liable to pay taxes.If you are an NRI in Australia, ensure that you file your taxes on time. At the same time, do not forget that if you have any source of income in India, it is taxable back in India as well. Following are the top 10 reasons why you should file your taxes every year and do so on time.

1.Due Date

The ATO or the Australian Taxation Office requires all taxpayers to file their tax returns by the 31st of        October every year. Failing to miss this date might prove to be a bit harsh on your wallets. You must file your taxes every year on time to avoid getting any notices from the ATO.

2.Refunds

There is a possibility that you might have paid higher taxes to the government. A more realistic scenario is that you became a resident during a fiscal year. There is a considerable amount of difference in taxes when you become a resident. Filing your taxes and returns will ensure that you receive the additional amount back.

3.Penalties

The ATO has the authority to slap an FTL or failure to lodge on time penalty on you, should you miss filing your taxes for a financial year. The minimum amount that you might end up paying as a penalty is $210 and the amount goes all the way up to $900.

4.Checklist

Once you get into a habit of filing your taxes regularly, you can create a checklist from your past experience. This checklist will ensure that you do not miss out on certain aspects, which might have happened in the past. A checklist is also a great way of having a hassle-free tax filing process.

5.Documents

Tax filing requires you to submit a bunch of documents. When you file your returns every year, you get a much better hold on the documents that you need to submit for the tax filing. The easier option is to start collating all the documents from the beginning of the year.

6.Tax Agent

Filing your taxes every year can help you save money as well. Once you get into the habit, you will only gain confidence and might come to a stage where there is no need for hiring a tax agent.

7.Mandate

There are a few criteria which decide whether or not you should pay taxes to the ATO. If you qualify for any of them, it is mandatory to file your taxes and the returns along with it. For example, if you earn more than $37,000 you are liable to pay taxes.

8.Tools

Filing your taxes can be an exploration activity as well. There are several brands out there which offer tools and services to make your tax filing a little bit easier. Filing your taxes regularly will help you explore these tools.

9.Rectify mistakes

Filing your tax returns early will give you an opportunity to rectify if you have made any mistakes in your returns.

10.Quick Processing

The earlier you file your returns, the chances of you receiving a quick response from the ATO is much higher.Apart from the above, filing your taxes shows that you are a responsible citizen of Australia.

9 08, 2019

Tax Filing for your Indian Income for NRIs in Australia

By |2019-11-01T07:48:08+00:00August 9th, 2019|Australian Taxes, income tax, tax filling, tax return, Taxes|0 Comments

The Indian economy derives a considerable chunk of its revenue from income taxes. Thus, it should not come as a surprise if you have to pay taxes on your income. The income taxes are applicable to residents of the country as well as NRIs. However, the rules and perks related to income tax differ largely for residents and NRIs. Here is all that you need to know when it comes to tax filing for your Indian income.

Residential Status

Your residential status decides the type and amount of income taxes that you are liable to pay to the government. As per the Income Tax Act, an individual would qualify to be a resident of the country if they match either of the following.

  • If you have stayed in India for more than 182 days of a fiscal year.
  • If you have stayed in India for 60 days in the previous financial year and a whole of 365 days in the previous four years combined.

Should you not meet the above criteria, you would be tagged as an NRI.

Overseas Income

After establishing your residential status, one might wonder if their current overseas income will be taxable in India. This again depends on your residential status. For resident Indians, their global income, which is a combination of their income in India and income that they earn overseas, is taxable. On the other hand, if you are an NRI, you will have to pay relevant taxes on the income accrued in India.

The various forms of income one which you are liable to pay taxes include salary that you receive in India for any services provided. Rental income that you earn from a property or house is also taxable and so is any capital gains that you make on selling assets in India. Other taxable income includes interest earned on fixed deposits or savings banks. On the similar lines, if you have an FCNR or NRE account you do not have to pay any taxes on the interests. But interests earned on an NRO account are taxable.

Filing Your Income Tax

Once you have figured out your residential status, getting ready for your taxes becomes a step easier. If you receive income in any of the forms mentioned above, you are liable to pay taxes. The next step involves calculating your taxes. You can refer to the income tax slab for the fiscal year in contention to calculate your income taxes. As per the current tax slab rates, you don’t have to pay any taxes if your annual income is less than INR 2,50,000.

The same would be applicable to you as well. Should your income exceed this minimal threshold, you will have to pay taxes to the government. Apart from the income taxes, you might have to certain additional taxes depending on your annual income. If you earn above INR 50 lacs per annum, you will have to pay a surcharge. Additionally, taxpayers must also pay Health and Education Cess on the top of their income taxes.

Other Details

The last day to file your income tax returns in India is 31st of July. If you are paying taxes for a fiscal year, ensure that you finish your filing before the end date. Otherwise, you might have to pay some hefty fines. Should your income taxes exceed INR 10,000 you must pay advance taxes.

Even though you might not be staying in India, income generated in India is subject to income tax. The above should help you plan your taxes and take appropriate action.

 

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