As per the IRS and US taxation system, your worldwide income is taxable in the US as long as you are a tax resident.

• You can find your Tax residency by going through the IRS substantial presence test. In simple terms, if you have stayed in the USA for about 183 days, you should add your Indian income to your US 1040 tax return form.
• You can take the foreign tax credit for the taxes paid in India already as TDS (tax deducted at source).

NRE/NRO Tax by the Indian Government

NRE account interest income is non-taxable in India. Hence, no tax is withheld/deducted automatically by Indian banks.

On the other hand, NRO account interest is taxable at a straight 30% plus applicable surcharges and the cess.

You will be issued Indian TDS form 16A by your bank for this tax deduction which can be claimed in the US tax return as a ‘foreign tax credit’.

Calculate the Total Interest in the Indian Bank

Almost all the banks in India pay out interest quarterly (every 3 months). 

You just need to pull out each bank (e.g. ICICI, SBI, HDFC, Kotak, etc.) statement ending in March, June, September, and December. Find the interest pay-out and add up.

There is no clear guidance for the months or financial year that should be used that we could find. So, we suggest using the Indian interest from Jan to Dec to add to your US taxes.

This means:

• Count March’s (of the previous year) interest as well.
• Remember, the financial year in the USA is counted from 1 Jan to 31 Dec whereas, in India, it is 1 April to 31 March.

Indian Interest Conversion to USD

IRS publishes the exchange rate for all foreign countries as ‘year-end treasury rates’. Use this rate to convert India (or for that matter, any other country) to reach a USD amount.

It is possible that the current year’s rate is not published by the IRS. In that case, use the xe.com rate for Dec 31.

Example:

If you earned a total of 10,000 INR as NRE interest (add the sub-totals of all your foreign bank account’s interest), then your interest income in USD would be $143 if the exchange rate is 1 USD = 70 INR:

10,000 / 70 = $143

US Tax Form 1040 – Foreign Tax Credit

File the US income tax form 1040 with online services like Turbo Tax, TaxAct, HR Block, Liberty Tax, or FreeTaxUSA.

We have also used e-file.com and their online federal returns software is as good as any other with more free filing options.

Irrespective of the tax filing service you use, you should fill up Schedule B to disclose your Indian income as foreign income.

You should:

• Find the total amount of Tax (called TDS in India) deducted by the bank (by looking at bank statements).
• Indian bank should have sent you Form 16 (an Indian version of the tax form).

ICICI normally sends form 16 by postal mail or email if you have registered. The same may be available online for Citibank, SBI, or HDFC India customers.

On the other hand, If you paid any income tax in your foreign (the tax might have been applied if you are not from India) country, you should enter the information in the appropriate section.

FAQ

The post How to file US Tax on NRE, NRO Interest (without 1099-INT) appeared first on AM22Tech.

OCI means the Overseas Citizen of India and allows visa-free travel for Indians who have got citizenship in other countries like the US, Canada, UK, Australia, and others.

Benefits of OCI:

• Get you multiple entries, and a multi-purpose lifelong visa to visit India.
• Allows exemption from reporting to local Indian Police authorities for any length of stay in India; and
• Equality with NRIs in financial, economic, and educational fields except in the acquisition of agricultural or plantation properties.
• OCI is also issued to kids of Indian citizens who do not hold Indian passports.

OCI Reissue is not Required

1. Minor child up to 20 years – OCI renewal is not required for minor children on a change of
   passport. Only upload the latest passport copy and photos on the OCI website.
2. Adult OCI Issued after 20 years of age – OCI renewal is not required for any OCI issued after 20
   years of the applicant’s age.
3. Adult Older than 50 years – OCI renewal is not required after 50 years. However, you should
   upload latest passport and photos ONCE after completing 20 years using the below process.
4. Change of address/contact details – Renewal of OCI is not required for change of address.
   Upload the latest details using the below process.

OCI Reissue is Required

• ONCE after the passport renewal and 20 years of age
• Change of name, father’s name
• Change of nationality

If you are an existing OCI cardholder and require uploading the latest Passport copy and photo, please follow the following steps.

This process needs to be done within 3 months of Passport renewal. Ministry of Home Affairs has granted extensions to use existing OCI without re-issue till Dec 31st, 2021, and anyone planning to travel to India after Dec 31st, 2021 should upload a Passport copy and photo as soon as possible.

Since it takes 2 weeks to 4 weeks to update the system it is better to complete it ASAP.

Documents Required

1. Photo: Non-white background, Square (equal width and Height), Picture size should be less than
   500kb in size. You can use Google Photoscan app.
2. Scanned signature – Sign on plain white paper. Then, use an app like Adobe Scan to scan or click a picture.
3. A PDF copy of the Passport picture page in color – Use Adobe Scan.

New Passport Upload Process

#Step 1

Access the Indian government’s OCI website. Select OCI Miscellaneous Services.

#Step 2

Click Proceed button.

#Step 3

Read the instructions and select ‘I have read the instructions at the bottom of the page’. Then, click the ‘Accept’ button.

#Step 4

Select “Fill New Miscellaneous application”. In case you exit in the middle, you can come back and complete the application by selecting “complete partially filled Miscellaneous Application”. 

#Step 5

A new pop window opens with the application. Please save the Temporary application number so you can use it to come back in case you lost a web connection or to complete a partially filled miscellaneous application.

Enter the Passport number from the last page of OCI.

We recommend entering File No# from the last page of the OCI card. We tried using U-Visa No# and OCI number# but page errors prevented us from going forward.

#Step 6

Select the “Submit” button after filling in all the required information. This will complete Part-A of the application. If you are ready with the picture, signature scan, and passport scan you can select the “Yes I am ready with the image” button. 

If scans are not yet ready, you can select the “Exit Now” button and come back by selecting the “complete partially filled Miscellaneous Application”.

Resizing the image to 500Kb size. If you used the Google Photoscan app, you may already have got a smaller size image. If not, then you can use any photo edit app or the windows photo edit to resize the image to 2×2 inches.

#Step 7

When you select “Yes I am ready from step 11”, the screen will update with an option to upload the image and signature.

Select “Choose File” and upload the picture. Once the picture is uploaded you will see the crop button and you can adjust the picture by clicking the crop button. 

• Picture file size should be less than 500kb and
• The signature scan file size should be more than 10kb – A signature needs to be a 3:1 ratio (width: height) so once the signature is uploaded you can select the crop button and resize it to a 3:1 ratio.

After selecting the upload button and you want to upload again you can select “I want to upload again”. If not select “I have uploaded successfully”.

#Step 8

You will now have the option to proceed to Part B and upload the Passport picture page scan.

#Step 9

Answer the following questions.

The first question is tricky. Select “no” for the following question if the family has only one person with an OCI card.

Have you/any member of your family applied for Overseas Citizen of India registration earlier? * 

#Step 10

The next step is to upload the Passport scan (Only pdf is allowed) and you can upload it by selecting the “Upload Documents” button.

OCI Upload/Reupload

In case you exited before uploading the documents you can also upload by selecting the OCI document upload/Re-upload button on the main page here:

OCI Status Enquiry

You can check the status by selecting the “Status Enquiry” button and selecting proceed button.

Enter the passport number and File the reference number to check the status. It will take 2 to 4 weeks to get updated in the system. 

The post Is Indian OCI Renewal Required? How to Update New Passport? appeared first on AM22Tech.

If you have bought or thought about buying an apartment in India and can’t visit personally to take possession, use PoA.

Register Power of Attorney In India

Sharing rights with any of your family members or a friend by issuing a registered power of attorney is the legal and correct way of managing property, bank loans, stocks, and other assets located in India.

The builder or developer will also ask for a registered POA to give you possession of the flat and get it registered in your name.

Print this template for special power of attorney to share the property or apartment possession or rental rights.

If you are physically present in India and plan to leave soon

Documents Required

• The office of the registrar would need 2 witnesses to sign the POA in front of the registrar (Physical presence is required). Tip: Arrange for any 2 friends or relatives to visit the registrar’s office with you. There are always some people available outside the registrar’s office to help, with money.
• Carry self-attested documentary proof like address proof, voter ID card, passport, and Aadhar card in original along with their photocopies. You never know what they can ask for with no official published list of documents.

#1 Create POA

Write down the POA terms on an INR 100 stamp paper. At this point, the POA is termed a simple POA.

#2 Registration

Visit the office of the Registrar (commonly known as the office of the sub-registrar) for your residential location. Each region within your city may have different offices.

Example: Residents of Karol Bagh, Delhi would have a regional Registrar office located at Asaf Ali Road, Daryaganj.

#3 Photo Click

The registrar will click and store pictures of you, the POA holder, and the witnesses in the government records.

The registrar will keep a copy of the POA in government records and provide one to you with his office registry stamp. At this time, your simple POA becomes ‘Registered Power Of Attorney‘.

You are physically NOT present in India – NRI holding Indian passport

#1 Create POA

Write down POA terms on an A4-size plain piece of paper. Since you are not in India, you don’t need the Indian stamp paper.

#2 Indian Embassy Attestation

Get the POA attested by the Indian Embassy/Consulate in your country of current residence.

#3 Mail to India & Register in the SDM office

Send consulate / Indian embassy signed or attested POA to India by postal mail.

The PoA holder in India needs to get this POA registered to make it a valid document and term it as a Registered power of attorney.

Visit the SDM (Sub-divisional magistrate) office in the POA holder’s residence district in India (the person who you name in the POA) and NOT your address.

NOTE: The SDM (Sub-divisional magistrate) office and the office of the registrar are two separate government departments/offices.

Be prepared for extra money to be paid.

Processing time is 15 business days if you are okay to pay the extra charges demanded.

Once this POA is stamped by SDM, it is considered a registered power of Attorney.

No witness is required in the SDM office for registration.

Registered POA is acceptable in any government office for possession and registration (also known as conveyance deed) of property.

Education Loan POA

You can create power of attorney for taking an education loan from any national or private bank in India.

For example, You can create tried and tested power of attorney for banks like SBI, Punjab National Bank, or a private bank like ICICI, HDFC, etc to help your relative sign loan papers for you in India.

The education loan POA does not usually need registration in India. Only the notary in a foreign country or the Indian Embassy attestation is enough.

If your bank is asking you to specifically get the POA registered in India, then you can get it registered in the sub-registrar office.

The POA should also give rights to the POA holder to sign, a mortgage (any security to cover the loan) and you should explicitly mention that you will be liable for all actions taken by the POA holder.

You can create such power of attorney online using the apps.am22tech.com app. They offer a full refund if the POA is rejected by the Indian Embassy.

Real Estate/ Flat/ Land Buying Power of Attorney

The same app can be used to create power of attorney for real estate purchases, sales, possession, or getting an NRI home loan.

An NRI (non-resident Indian) can use the special power of attorney to buy, sell, or take possession of a real estate property in India.

The same POA can be used for managing home loans in India by a member of the family. Your POA holder can make payments for home loans like SBI Maxgain, HDFC, ICICI, and other banks.

Note that you will need to get the POA attested by the Indian embassy before registering it in India.

Documents Required for Registration of POA

If you are an NRI, you should check the process to have the attested power of attorney from the Indian Embassy

1. Affidavit (on stamp paper of Rs. 100) for PoA holder’s swearing for his/her identity. A nominal stamp duty of Rs. 4 or Rs. 10 also needs to be paid. Check with your local SDM office for details.
2. The Envelope which was used to send the POA from the US to India is also required. Sounds strange but it was asked by the officer in the SDM office (smelling bribe?).
3. Passport photocopies of the Executants (Person/s who have created the POA) in the Power Of Attorney. For example, both husband and wife are executants of the POA.
4. 2 (number) Address and ID proof of the POA holder. One could be a passport and another can be an electricity bill, water bill, etc.
5. A document that can prove the relationship between the POA holder and POA executants. This is completely illogical since the POA holder can be your friend too. In our case, my wife had the name of her mother listed in her passport and this proved that she is her mother.
6. You will have to submit the original POA along with the documentary proof to the SDM office.

FAQ

The post Create NRI Power of Attorney for Education Loan, Real Estate appeared first on AM22Tech.