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January 19, 2000

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"How can my sister in the US repatriate her family pension from India?"

The Rediff Money Channel presents everything you wanted to know about personal banking, but didn't know whom to ask. Kannan Ranganathan, who has over ten years of experience in banking and financial services, is here to remove all your doubts.

Readers Note: Please keep your questions short.

My sister, a widow, lives in the US and is an American citizen. She is drawing family pension on the strength of her husband's death who served in the Indian army as an officer.
1) Can she repatriate her family pension accrued in India to the US considering that she has the status of a citizen? If possible how?
2) What are the income tax liabilities here if any? She is a senior citizen.

Mohan V K

According to the regulations, amounts are allowed for repatriation in a phased manner depending on the period under consideration. For this purpose, an authorised dealer through whom the remittance is sought to be made should be designated and an application made to it in Form RCI along with a chartered accountant's certificate that the amount is eligible for remittance.

Remittance of pension may be allowed if the applicant does not have any other income in India, without insisting on a certificate from chartered accountant/income tax authorities regarding payment of income tax. In such cases, authorised dealers should obtain a "one-time certificate" issued by the pension disbursing office that the applicable income tax is being deducted by them.

I was born in India and migrated to Australia in 1993. This month, I have become a citizen of Australia. I am expecting around Rs 60,000 to Rs 70,000 from my Indian employer on account of my provident fund, gratuity etc. How can I get this money in Australia legally?

Hari Sharma

Refer to the previous answer

I went to the US on an assignment on an H1B visa in October 1998 and stayed till August 1999. Subsequently, I returned to India. The Indian employer paid salaries in India and I paid tax on it. I was also paid salaries in the US which included the Indian portion also converted to dollars and the entire amount was subjected to US tax.
1) Can the amount that I saved in the US be legally transferred in any form to my account in India?
2) What details should be included in my return to be filed in India?
3) Since the tax has been paid for my Indian salary in India and the US, can the refund tha I get from the US tax department be put in my bank account in India?

Nagabhushana Samaga

As you have been outside India for less than one year, you are required to close your foreign currency accounts and arrange for transfer the balances to India within three months of the date of your arrival in India. This could be done through normal banking channels as a foreign inward remittance to your account in India.

Does a debit card work in the same way as a credit card?

Nimish

A debit card would normally require you to maintain an account with the issuer. Whenever, you use the card (usage is similar to a normal credit card), the amount is automatically debited to your account.

How do you calculate reducing balance interest rate? It will be good if you could give me a detailed answer for this.

Suresh Vishwanathan

This could be done using the IRR function in an Excel spreadsheet after defining the exact cash flows. We will send you a detailed Excel sheet. Essentially, the reducing balance method takes into account the fact that every installment on a loan has a principal and an interest component. While the flat rate pre-defines an equated monthly installment, the actual effective rate of interest is higher than the flat rate as the principal outstanding keeps reducing with every installment paid.

I am an NRI residing in the UK for the past four years. I have invested from my NRE account into three PPF accounts in the names of my minor daughter , my wife and myself. My intention was not to claim a tax rebate but to create a pension fund which I cannot touch for quite some time. Can I keep investing in the PPF for the next 15 years like this from my NRE account? Do I have to intimate the tax authorities regarding this ?

Vidyasagar Duvvuri

NRIs can subscribe to PPF from their non-resident accounts (NRE and NRO) in India. The maturity proceeds should be credited to the same account from which the investments were made. But PPF is attractive only for earning tax rebate on income earned by an NRI in India.

Earlier:

'For how long can I continue my NRE account after I return to India?' 'What is the cheapest way to send money to my parents in India?'

'How can i ensure that i earn the maximum possible interest on my deposit while ensuring that can i make withdrawals when i want?'

Personal Banking Center

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