Nri Tax — CA Guides & Articles

Every February the same message circulates in NRI investor groups: sell your equity funds on March 30, book Rs.1.25 lakh of long-term gains tax-free, buy back on March 31, and you have reset your cost base for free. The strategy is real. The way most people describe it is wrong on three separate counts. The Rs.1.25 lakh LTCG exemption under ITA 2025 is an aggregate per taxpayer per tax year, not per folio, per demat account or per sale. India genuinely has no wash-sale rule for listed securities, so the sell-and-rebuy gap is legal, but the repurchase restarts the 12-month holding clock at zero. And for NRIs specifically, a TDS layer sits between the sale proceeds and the bank account that resident investors never encounter: the AMC deducts on the computed gain without knowing your exemption headroom, so tax is collected first and refunded a year later. The entire strategy is capped at Rs.15,625 of annual benefit. This article sets out what the law says, what the TDS arithmetic does to NRI portfolios, and a nine-step process to execute it correctly before Tax Year 2026-27 closes.

Every February the same message circulates: sell shares worth ₹1.25 lakh of profit before 31 March, buy them back the next morning, and you have legally erased that tax forever. The strategy is real and legal — but the people repeating it get three things wrong that cost more than the tax saved. India has no general wash-sale rule for harvesting gains; Sections 94(7) and 94(8) target dividend and bonus stripping only, and GAAR needs a ₹3 crore benefit before it bites. The ₹1.25 lakh exemption under Section 112A is per PAN per tax year, not per demat account — three brokers does not mean ₹3.75 lakh. And for NRIs the AMC deducts TDS under Section 195 without applying the exemption at all, locking up the refund for 9 to 15 months. This piece sets out the exact arithmetic, the assets the exemption does not cover, and a nine-step execution sequence under ITA 2025.

Almost every property seller says the same sentence: "I'll put the gain into NHAI bonds and the tax goes away." Two things are wrong with it. NHAI stopped issuing capital gains bonds years ago, so the instrument no longer exists. And the relief itself is capped, time-bound, and structured in a way that quietly disqualifies a large share of the people who assume they qualify. This article sets out what Section 54EC actually covers under the Income Tax Act 2025 — why only land and building gains qualify, why the Rs.50 lakh ceiling now spans two Tax Years rather than one, why the six-month window runs from the date of transfer and not from the date consideration is received, and why the five-year lock-in cannot be broken even by pledging the bonds. It also covers the issuers still in the market — REC, PFC and IRFC, all at 5.25% with fully taxable interest — and the specific Section 195 withholding problem that strands NRI sellers' liquidity before they can fund the investment, plus the Section 197 certificate that solves it.

Most promoters believe internal audit is a rehearsal for the statutory audit, or that their statutory auditor can simply do both. Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 says otherwise. Internal audit is a separate, continuous, Board-facing function with its own scope and reporting line, and Section 144 expressly bars the statutory auditor from performing it. This piece sets out exactly which companies are caught — including the borrowing test that measures peak outstanding at any point during the preceding year rather than the year-end balance, which catches companies whose closing balance sheet looks modest. It explains how internal audit differs structurally from statutory audit under Section 143 and from tax audit under Section 63 of the Income-tax Act, 2025, walks through four real scenarios including group structures and NRI-promoted companies, and gives a seven-step appointment checklist. It closes with the penalty position under Section 450 and the CARO 2020 clause (xiv) exposure that lenders and acquirers actually read.

Most salaried professionals believe company-provided benefits either escape tax entirely or are taxed on what the employer spent. Both beliefs are wrong. Perquisites are taxed on a statutory valuation set by law — a formula that often bears no relation to the employer's actual cost — and every one of those valuation numbers changed on 1 April 2026 when the Income-tax Rules, 2026 replaced the 1962 Rules. Rent-free accommodation slabs were redrawn at 10%, 7.5% and 5% of salary. The children's education threshold tripled from Rs.1,000 to Rs.3,000 per child per month. The free-meal exemption jumped from Rs.50 to Rs.200. The interest-free loan de-minimis rose from Rs.20,000 to Rs.2,00,000. Gift vouchers are tax-free only up to Rs.15,000 a year — and that is a cliff, not a slab. This article works through Section 17 of ITA 2025 read with Schedule III, values a real Bengaluru salary package line by line, explains where NRI and split-year employees get mis-computed, and gives a seven-step checklist to reconcile your Form 16 before your employer files it.

Ask ten salaried people in India when gratuity becomes payable and nine will say "after five years." Ask what happens if they leave at four years and eight months and they will say they get nothing. Both statements are wrong in ways that cost real money. The five-year rule exists, but Section 2A of the Payment of Gratuity Act, 1972 treats a year as completed at 240 working days, meaning 4 years and 240 days qualifies. This article breaks down the actual eligibility test, the basic-plus-DA computation formula under Section 4(2), the Rs 20 lakh statutory ceiling, and the separate tax exemption under Section 10(10) of the Income-tax Act, 1961 (Section 11 read with Schedule II of ITA 2025) which operates as a lifetime aggregate across all employers rather than a fresh ceiling each time. Includes five worked scenarios covering the 4-year-8-month exit, the gross-salary misunderstanding, crossing the Rs 20 lakh cap, second gratuities, and death in service, plus the Form I, Form N and Form 12B procedure.

Every August the same advice circulates in office WhatsApp groups: skip the declaration form, you will claim it all back at filing. It is wrong, and from Tax Year 2026-27 it is expensive. TDS on salary moved from Section 192 of the Income-tax Act 1961 to Section 392 of the Income-tax Act 2025, and the new regime is now the default — silence no longer means old regime with your usual deductions, it means the new regime with almost nothing beyond the Rs.75,000 standard deduction. This article explains the 12-month projection method employers must use, what Form 12BB actually does and when it must be filed, why mid-year joiners and returning NRIs consistently get under-deducted, and the exact steps to fix over-deduction forward instead of waiting eight to eighteen months for a refund. Includes four worked scenarios, the reconciliation routine against Form 168 (formerly Form 26AS), and the advance tax instalment dates that catch people who assume payroll has handled everything.

The claim appears in every NRI forum: India caps you at one million dollars a year. It is repeated as though it were a single universal ceiling on everything an NRI owns in India. It is not. The USD 1 million limit is a capital account limit created by the Foreign Exchange Management (Remittance of Assets) Regulations, 2016, and it applies only to conversions of your Indian asset base -- property sale proceeds, inherited corpus, accumulated NRO legacy balances. A very large share of what NRIs actually remit sits on the other side of the line. Rental income, NRO interest, dividends, pension and family maintenance are current account transactions under FEMA Section 5 and carry no annual ceiling at all. NRE and FCNR balances are freely repatriable without limit. This article maps the current-versus-capital divide precisely, walks through the Form 145 and Form 146 filing sequence under the Income-tax Act 2025 (formerly Form 15CA and Form 15CB), explains the per-PAN aggregation that catches spouses and multi-bank holders, and sets out the account segregation step that prevents most FEMA desk rejections.

Most finance teams and NRI promoters still describe External Commercial Borrowings using rules that stopped applying in February 2026. The Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026, gazetted on 16 February 2026, supersede the operative provisions of the March 2019 ECB Master Direction and move India from a prescriptive ECB regime to a principle-based one. The rigid all-in-cost ceiling is gone, pricing is now market-determined, the annual quantum cap has been replaced by a dual test of USD 1 billion or 300% of net worth, and any person resident outside India — including an individual NRI lender — is now a recognised lender under the automatic route. Refinancing is no longer blocked by the requirement that the new rate be lower than the old. What survives is the Minimum Average Maturity Period, the prohibited end-use list, and the reporting discipline, now on revised RBI forms. On the tax side nothing has softened: interest paid to a non-resident lender remains Indian-source income, withholding applies, and remittances still run through Form 145 and Form 146 with credits reconciled in Form 168 under ITA 2025. This article sets out what changed, four real NRI scenarios, an eight-step execution checklist, and the questions promoters get wrong.