Travel - International Indian

Q: Are there any declarations I will have tomake to any authorities for this acquisitionin my name?A: Under the current guidelines you donot need to make any declarations for theacquisition of the said property.Q: My father has funded thisproperty through a friend of hisin India. Should he remit theamount due to his friend fromDubai?A: Yes your father will have topay into his friend’s bank accountin India to extinguish his debtto him. Any form of paymentotherwise will be construed as aviolation of FEMA.Q: Should there be a documentto state that my father hasgifted this property to me?A: Your father has bought theproperty directly in your name out of fundshe has provided and the property is registeredin your name. It will be better to have adocument evidencing the fact that he hasgifted this property to you.Q: What is the implication of thistransaction under the Indian Income TaxAct? I have also rented out this propertyand getting a rent from the last year.A: Since the property is owned by you andyou have rented it out, it is necessary for youto file a return and pay the taxes on the rentalincome along with any other interest etc.income you may have in India.Q: What is the year for which I will have filethe return?A: Unlike in the USA where you follow thecalendar year for tax purposes in India wefollow the year beginning 1 st April and endthe next 31 st of March. You will have to fileyour return before the 31 st of July 2012,however this year there is an extension till31 st August.Q: What do I need to file a return?A: You need to get a Permanent AccountNumber (PAN) Card. The procedure isavailable in the site www.incometaxindia.gov.in. Besides you will have to provide the bankaccount statements which you have in Indiato your CPA for him to track all the incomesin India besides also getting benefits forpayments of Municipal Taxes and Water Taxes.Q: As an American citizen working in Dubai,I do not have a bank account in India. Therent from my flat is received by my parentsinto their NRO bank account in India, sohow do I show accountability to the IT deptfor the rental income received?A: As the owner of the property in India it isimperative that you have a bank account. Incase you do not have a bank account and theamounts are received by your father on yourbehalf there are two options you have:Give a letter of authorisation to your fatherto receive the money on your behalf and alsoinstruct the tenant to pay into his account.This cannot go on forever and will have to berectified as early as possible.However it will be of paramount importancefor you to open a bank account .Alternatively you can have your name includedin the NRO account of your father and mother.Prem Karra is a Fellow of the Institute of CharteredAccountants of India with 35 years in practice. He wasa financial advisor to Ten Sports, and studied at MadrasChristian College High School and Vivekananda College‘‘As theownerof thepropertyin Indiait isimperativethat youhave abankaccount inIndia.‘‘The International Indian 71