ONLINE GD AT URPERCENTILE : SHOULD NRIs INCOME ABROAD BE TAXED IN INDIA
Following is the CHAT GD we had on :
TOPIC : Should NRIs income earned abroad be taxed in India.
URPERCENTILE.COM COOMENTS IN THIS GD :
Mahadevan Iyer did well, comments were on the topic most of the time, interacted well with other members. Clears this GD.
Nithya Kamashi : Most of the comments were on what the situation is like at present. Lots of facts and figures, but very few comments on the actual topic, should NRI be taxed on foreign income ?
ISHAN Sethi , did well, but made a big blunder of coming out with a statement which was not a fact. This was a big mistake and should not be repeated. Even if you perform well in rest of the GD the chances of selection are not there because of one incorrect statement .
Others need to participate more and contribute more to the discussions.
sunny arora: B.E 0yrs SIBM
Ratna Ramani: Hi, I am Ratna and i am doing my final year Engg from S.RM engg college
Mahadevan Iyer: Hi every one, I graduated from Vasavi COllege of Engineering, and at present working for TCS, Hyderabad.. got calls from IIM A, IIMC, IIMK, IIMI, IIML and NMIMS
Ishan Sethi: Hi everyone, I'm Ishan Sethi from MSIT, Indraprastha University Delhi, I'm in my final semester of B.Tech(compter science) and have calls from IIMA,IIML,IIMK and IIFT
www.UrPercentile.com: The topic of the GD : Should NRIs income earned abroad be taxed in India.
sunny arora: well a large number of indians are going abroad for earnin that big buff which is difficult over here and india is loosing great people but this can be reduced if their income is taxed over here
Mahadevan Iyer: NRI's are basically of Indian Origin who are not residing in India, this can include a person whse Grandfather migrated or he can be the one who migrated
Ishan Sethi: Well, in light of the recent Pravasi Divas that was concluded in Hyderabad.. we can understand the importance of NRI's to our economy...
Ishan Sethi: So far NRI income is not taxable.. unless it is earned in INdia
Mahadevan Iyer: a family living for the past 50 or sixty years has nothing to do with india, but a person who has recently migrated owes a lot to the country
Ratna Ramani: NRI s do go abroad to earn money.for a better lifestyle but some do turn back to contribute to homeland, if their income is taxed it might be discouraging
Nithya Kamakshi: Double Taxation Agreement assumes significance here
sunny arora: that makes the NRIS dominating and more powerful den people already residing here
Ishan Sethi: To begin with when a person goes abroad to earn, he/she should not come under Indian Tax Laws
Ishan Sethi: It'll make the inflow of funds from the NRI's reduce in quantity, if we start taxing them...
Nithya Kamakshi: but its the applicable in most countries
namit pandit: i understand that a person who goes abrod owns a lot to the country but imposing a tax on him/her is just not fair
Nithya Kamakshi: thats y the concept of DTA
Mahadevan Iyer: i agree with u rocky..., but if he has recenly migratedm doesnt it mean sense for him to return something to the country
Ishan Sethi: could u expand DTA?
Nithya Kamakshi: where countries mutually agree to share the tax benefits
Mahadevan Iyer: friends, the topic is abt their income not their investment...
Ratna Ramani: for a country still in devaloping stage like India, the contribution from NRI S assumes significance
Gayatri Sundaram: hmm thts is right i wld agree with ratna
Ishan Sethi: exaclty ratnaramani... hence taxes might just reduce that inflow...
Nithya Kamakshi: Double taxation Agreement between countries entitle tax payers to pay tax in just on e country, in other words
Mahadevan Iyer: if he is earning abroad, then he can return only if he wants to pay back.. isnt it true???
Nithya Kamakshi: same income is not taxed twice
Ishan Sethi: we could quite easily see how states were trying to attract NRI'a at the Pravasi Divas
Mahadevan Iyer: the topic is abt their income not their investment...
Gayatri Sundaram: well but then when it is that they earn in lacs payin a few tthousands as in come tax is nt goin to affect then anyways
Mahadevan Iyer: so, lets go about their income friends
Nithya Kamakshi: true NRI contribution is significant for Indian Economy as a whole
Gayatri Sundaram: thts wat i feel
Ishan Sethi: But, snithya DTA could create a lot of complexities in the Indian Tax Structure..
Ratna Ramani: you are right.......but if their income is taxed, the major contribution investment might be affected
Ishan Sethi: I understan that mahadev... But income would be directly proportional to investment..
Nithya Kamakshi: DTAs have always been in existence
Nithya Kamakshi: Tax is complex i guess
Ishan Sethi: I don't think DTA has been in existence in India..
Nithya Kamakshi: It is - take it from a Chartered Accountant, Sec 90 of the Income Tax ACt
Ishan Sethi: See it wouyld make it more complex since DTA policy might vary from country to country depending on India's relations with that country
Mahadevan Iyer: i am afraid i disagree, income is what he slogs for in that country... he can pay back, bbut should he be charged for slogging in some other countyr??? he pays tax even there
www.UrPercentile.com: India does have DTA agreement with many countries.
Ishan Sethi: I'm sorry... But I was not aware of that fact.. But again I see the word many countries and not all .. That makes a lot of difference
Nithya Kamakshi: true not all
Mahadevan Iyer: true... very true.....
Ishan Sethi: I believe uniformity would become important in such a case
Mahadevan Iyer: uniformity in what sense, cna u elaborate??
Nithya Kamakshi: i think Tax is progresssively higher - in the sense higher the income, higher the tax
Ratna Ramani: exactly.uniformity in wat sense Gayatri Sundaram: in the sense?
www.UrPercentile.com: are we moving away from the topic!!!
Nithya Kamakshi: and NRI earn substantially higher income so i guess its permissable to tax them
Ishan Sethi: uniformity for India with different countries... It might differ from country to country
Gayatri Sundaram: but then they wld also get a feeling right that they are payin double tax
Mahadevan Iyer: life in any foreign country is not easy my friends one has to reestablish one self
Ratna Ramani: shall we concentrate on whether NRIs are to be taxed.....
Nithya Kamakshi: true some countries are tax haven but not alll
Ishan Sethi: Well let us get back to the topic
Mahadevan Iyer: after one establishes onself, it doesnt go down well if one has to pay double tax
Ratna Ramani: this is more abt the tax....thell have to be paying
Gayatri Sundaram: countries like?
Nithya Kamakshi: There are a lot of under developed / developing countries across the globe which act as tax haven
Ishan Sethi: NRI's have an important role to play in the building of the Indian Economy... There are countries like Bahrain that do not have taxes at all
Ishan Sethi: Now suppose we tax an NRI from Bahrain.. would he not feel victimised?
Mahadevan Iyer: but, is it ethical for Indian Govt to charge him for his hard work out of the country??
Gayatri Sundaram: well but then he should pay some tax right as an indian
Mahadevan Iyer: We can charge him, if he makes money out of investment from india
Nithya Kamakshi: NRI benefits are two fold - one the tax they pay and second the multiple effect on the economy through their investments
Ishan Sethi: Why should he? He went out there to earn more.. He could return that to India by in terms of Investment...
Nithya Kamakshi: money earned in India is anyways taxable - NRI or otherwise
Mahadevan Iyer: yes.. true... but lets charge his investment/ returns from investment alone
Ishan Sethi: Yes mahadev.. i mentioned that earlier.. It is taxable anyway
Mahadevan Iyer: taxing his investment is not a good sign for us, coz he will then invest money in his home country
Ishan Sethi: See if a person earns in dollars.. let us not forget He spends in dollars too... to tax those dollars would not be fair on him
Ratna Ramani: when u say home country, is it the country he has adopted??
Mahadevan Iyer: so, we can tax his returns according to his the returns alone
Nithya Kamakshi: actually from tax point of view their is a distinction in NRIs - whther person of indian Origin or not
Mahadevan Iyer: sorry, home county in hte sense the country he adopts but, taxng the returns, may give rise to lot of issues..
Ishan Sethi: well I gues snithya u must enlighten us on that a little further.. not all of us are completely familier with the existing structure
Nithya Kamakshi: persons of Indian origin have their entire income taxed
Mahadevan Iyer: for example, if he is from a friendly country, it may not go well dwn the diplomats
Ishan Sethi: even if it earned abroad?
Nithya Kamakshi: yes
Ishan Sethi: but that is unfair..
Nithya Kamakshi: both earned and received will be taxed for persons of indian origon
Mahadevan Iyer: snithya, is it true?? i dont see any of my friends who are working in US paying any tax...
Gayatri Sundaram: but then if he adopts to someother country? then?
Ishan Sethi: I think another issue it might hit is the Dual citizenship thats been proposed..
Mahadevan Iyer: but, doesnt the group think that taxing the returns may drive him away???
Ishan Sethi: If what you say is true.. snithya, then the person might leave India and take another citizenship..
Ishan Sethi: That qould drive away people from their own country, I agree with you mahadev
Gayatri Sundaram: yeah i wld also agree
Nithya Kamakshi: no - the catgorisation is dependednt on ur citizenshiip but on the number of days u stay in india in the last 7 yrs
Ratna Ramani: that might also be a method to force the talented manpower to stay in India
Mahadevan Iyer: so, we can tax the returns of that individual who has been investing... is it viable groupp??
Nithya Kamakshi: citizenship does not affect tax
Gayatri Sundaram: suppose that he stays juz fr a few days say . in that case
Nithya Kamakshi: 180 days is the criteria
Mahadevan Iyer: snithya, can u throw more light on your point, give the group more idea abt ur point
Ishan Sethi: and make one final statement about who gets taxed.. new points everytime change the whole argument!
Nithya Kamakshi: persons staying in India for less than 180 dyas for the last 4 yrs need not pay tax on income earned and received outside india
Mahadevan Iyer: allright,, but does it make him an NRI???
Ishan Sethi: u just said 7 years
Ratna Ramani: dont u people think that if you force a NRI to pay tax in India, it might also be a hurdle for him to go abroad and force him to look for better avenues in India itself
Gayatri Sundaram: in 7 years suppose he stays for less than 6 months
Ishan Sethi: that is the entire point ratna...
Gayatri Sundaram: then he neednt pay tax , is it ?
Nithya Kamakshi: 7 yrs is another category - comon tax cannot be so simple, rite
Nithya Kamakshi: there are two categories
Mahadevan Iyer: k... good point snithya
www.UrPercentile.com: Thanks everyone, request everyone to give a concluding statement and your views on , should NRIs income abroad be taxed in India.
Nithya Kamakshi: i mean there are exemtions depending on the period of stay in the country
Ishan Sethi: No, I do not believe NRI's should be taxed on anything they earn outside India.. Instead we should try different ways of persuading them to invest more.. that will help the economy much better and keep NRI's closer to India
Mahadevan Iyer: An NRI who is earning from his investments, which include Real Estate and even as FDI, should pay tax depending on his earnings and also depending on the financial status of him and the country he is living in
Ratna Ramani: Finaaly, i think at the moment, India needs its people to invest more in the country, so it would be advantageous not to tax their income.....so their income should not be taxed
Nithya Kamakshi: Should be taxed since not all NRIs invest in the Country. Despite the tax burden, NRIs invest coz the income on investment is substantial. Ultimately the return drives the investment
Gayatri Sundaram: we can say that reducing the taxations, shld increase the investment
www.UrPercentile.com: Ok , thanks everyone, we will send the result on the group in next 2 days.
Mahadevan Iyer: gayathri are u concluding with this??
www.UrPercentile.com: Any one want to comment on this excerise ? on this mock chat GD and on Urpercentile.com
Gayatri Sundaram: thanks n yes
Ishan Sethi: thank you... I hope the entire group won't be scraped
Ratna Ramani has left the conference.
Nithya Kamakshi: thanks everyone for the interesting discussion
Gayatri Sundaram: thanks all
Mahadevan Iyer: i would like to add that its a great initiative
Ishan Sethi: well I think there was a huge disparity in knowledge.. Snithya ofcourse knew more about it than some of engineers.... But an interesting and informative excercise all the same!
Mahadevan Iyer: thanks all.. it was a great experience
Gayatri Sundaram: actually i dont hav anyidea on the taxations, if snithya wld give more points i believe it wld more useful
Nithya Kamakshi: this mock GDs are immensly helpful Nithya Kamakshi: sure anytime
Gayatri Sundaram: thanks a lot
Ishan Sethi: well snithya... we need economy classes
Gayatri Sundaram: heheh right
Ishan Sethi: economics I shouls say!
Ishan Sethi: thatnk u moderators...
Gayatri Sundaram: or they should intro an economy subj in Engg
Ishan Sethi: great initiative... keep inviting us.....
Gayatri Sundaram: yeah thanks
Nithya Kamakshi: how abt taking it in IIM A??
Nithya Kamakshi: three cheers to urpercentile
Ishan Sethi: hip hip hooray!
www.UrPercentile.com: Cheers, Best of luck
Gayatri Sundaram: thanks
Ishan Sethi: thanks boss!