OCI Card Versus PIO Card Holders

Hi there   (Subject VISA and include Taxation)
Many of you are not aware of this, and hence I am writing it here:
1)
As per FEMA act  and Income Tax Act 1961 the PIO and OCI
Card holders should be aware that it is two different things
when it comes to number of days stay in india without Taxation.

I am an Indian by birth including my parents and grand parents and I hold now a foreign passport. Therefore, with my OCI Card I can stay in India .......now comes the important part

a)
I Can stay lifelong in India without Visa, with OCI Card, but will be taxable on my gloabl income, since my stay exceed 182 days in India!

b)
What if I want to stay Long but dont want to pay tax in India?  Then the answer is my stay is limited to 182 days and much less.
Just make sure that you involve a professional Chartered accountant who are well versed with FEMA and Tax rules.They are the only one who can compute the number of days you can stay in India every year so that you don't hit Taxation, if you want to be a non-resident. You have to provide them your historic number of days spent in India for the past 4 years and 10 years, and they can simulate the eligibility of days you can stay in the future for 4-5 years in advance

c)
My wife is foreign national. She is not Indian by birth. Also
her parents and grand parents are not Indians. She has a PIO Card

d)
With this PIO card she can visit India visa-free and its validity
is 15 years.

e)
I recently found out through my Chartered Accountant that she can only stay less than 90 days (not as everyone thinks 182 days) every year since she is not a real PIO under Income Tax Act. (Where as under FEMA rules, yes)

f)This would mean that, like me, she is not entitled for a 182 days or less threshhold but, only between 80-90 days or less

So Indians, who are married to foreign nationals as their spouse need to research on this thoroughly if they want to stay in India.  Don't mix up FEMA and Income Tax rules. This advise is valuable to those who want to vist India but want to keep their
NRI Status.  I am afraid that this rule is also applicable to foreign nationals.  So this is a humble warning. Respect the law and avoid future troubles.

Hi Damodhar,

Thank you for the share, this will certainly help some members.

Regards,

David.

Hi David,
My pleasure
Damodhar

Hello Damodhar
I am a Polish citizen married to Indian citizen. WE both want to live in India. I have got a job offer from Indian company but I was wondering how big tax will I pay after I get my PIO card. Do you have any idea?

And what does it mean that your wife if not a REAL PIO HOLDER?

Best regards

Hello,

This link may give you the information you are looking for.

http://nriinformation.com/


All the best

Cynthia Singh

Hi Asikk, sorry for the delay in reply.
1) Regarding the Taxation, kindly consult Certified Chartered Accountants  in India who are specialised in NRI Taxation.
The link  http://www.nritaxservices.com/tax_ex.htm is very helpful and if uncertainty, you can get their services for Taxation as well as for Resident of India/Non Resident of India issues.  Of course their services are subject to a fee but it worth it because they have enough expertise in this area.
Their Prices are not over-exaggerating. I always seek their help whenever I have tax issues, because you can read many articles, but it is indeed confusing when it comes to Taxation in India.

Answer to your question: My wife is a non-Indian. Though she hold PIO Card,  she is not an Indian by birth, nor her parents or grand parents. When it comes to maintaining non-resident Status in India and to avoid Taxation in India,  she can only stay less than 90 days instead of 182 days like in my case (Indian by birth). This is for every financial year.

PIO Card holder category 1: (under income tax act)
Indian by birth, (or) whose parents or grand parents from India
can stay around 182 days or less as non-resident and tax free

PIO Card holder Catergory 2: (under income tax act)
Not Indian by birth (or) whose parents or Grand parents not from India can stay only around 90 days or less as non-resident and tax free. They are not entitled for 182 days stay.

In your case,  Non resident issue does not apply. Since you are moving to India and employed there,  you both will become resident of India.  PIO in this context is valid for 15 years
and stay in India is fully eligible. In this case, you both have to check
a) Transition rules from NRI to Resident of India
b) I think for certain period,  your tax will be lower because
   of the Transition period.  That's the reason why I say check with  CA's carefully as it is tricky.
c) Indian Tax law allows you to benefit the lowest tax if you
   carefully puruse your individual case with CA's.  They are the only people who can help you in this regard. This way you are always backed up and nothing to worry about when you are in India, or for that matter want to go back to Poland depending on your circumstances in the future.

Thanks a lot for those detailed explanations, I didn't know there were 2 kinds of PIOs with different impacts on the tax issue...you are right, better have a good CA on our side!

ChristelleGM, My pleasure
Kindly get in contact with 2 or three CA's and check their fees
to avoid exhorbitant fees. Especially in your case, the CA's should be specialised in the area of foreigners because the normal CA's won't have that kind of expertise. Please note that
you may enjoy tax concessions for a certain period of time
till you become a Resident of India. Good luck and enjoy India
as it is as always a beautiful land with its own charm!

thank you for this !!!

I am now living in India 25 years as a housewife ,
my husband Indian ,

and never made the PIO card -
I have residential permit renewed every 5 years

with a PIO Card , would I be able to live in India
without this every 5 years residential procedure ?

Hi neline,
PIO Card has a 15 year validity. However after every 182 days stay, you need to Register or report to the FRO which is a hassle. If you have 5 years validity, ii is better to renew every 5 years instead of going every 6 months to report to FRO.

Hi Damodhar ,
thank you !!
does the PIO card offer other advantages than reg staying in India ??

in this case I can have the PIO card and continue same time my  5 years policy

Hallo neline,
Just putting some link here in which you may get some valuable Information:
http://nriinformation.com/articles4/pio_card.htm
which is an unofficial Website.

or else, http://mha.nic.in/pdfs/ForeigD-FAQs-PIO-Crd.pdf
(Official site of Ministry of Home Affairs, India where you can also get Information about the benefits/Advantages.
Aso click http://mha.nic.in/pdfs/oci-chart.pdf

Hope this will help you & good luck

Hello Damodhar,

If you are a PIO n°2 and stay less than 6 months in India, you don't need to register at immigration.
If you don't work in India, how can the tax authorities check that you stayed more than 3 months and then have to pay tax?

Thanks

Christelle

ChristelleGM,
Are you aware that the tax officers where you reside can under any circumstances control your passport where they will specifically check entry and exit stamp from the airport authorities.  Many people are not aware of this and it is always wise to keep the passports (even the used and void ones) in tact to show as proof. The criteria of residentship is calculated
not only per year instead previous years for 3 years or 7 years all depends on individual situation of visit on an accummulated basis.  So the track record of visit is the core essence of deciding whether one is resident or non-resident.  Hope this help:-)

Thanks Damodhar for thoses details, I know there are some checking at the immigration office and airport but didn't know about the tax authorities.
Better have all the informations ready then!

Christelle

You are very welcome ChristelleGM.
I am not frightening you.  This is the fact. However, if you clarify with your Chartered accountant, they can simulate days eligible for your stay every year in India taxfree for 2-3 future years. For that,  you have to provide them Entry/Exit Dates to India based on the Immigration authorities stamp from your passport. For a reasonable amount, they will perform this task for you so you are pretty clear about your stay in India. Hope u enjoy your stay:-)

Hello Damodhar

I am British born Indian holding OCI card along with my 2 children.
My wife is British born Pakistan origin who has NEVER been a citizen of Pakistan Would she be eligible for PIO card.
We have been married for 25 years and have a home in India hence the reason why she requires long visa.

hallo Damodhar ,

Why I noticed this so late is a mystery - thanks a lot !!

Neline Mondal

Thanks for discussing this matter in detail and keep it up. Also does any one have the contact details of CA specialized in this segment of taxation and co. formation etc. etc. ?

Hi bhaksu,
Frankly speaking no clue on this. If your are overseas, kindly contact the Indian Embassy on this who can answer your question.

If your wife is british born, should be eligible for PIO but not sure whether they look her parents and Grand parents born in Pakistan.  Kindly check this for sure. Rgds

Hi neline mondal,
it is always late once you figure out. So is me too.  I have figured out certain things too late which I wish was wise not to do.  But you can always find a wise solution which suits you and never regret about it.

Hi Naval Rungta,
I do not know whether it is appropriate to give names of CA on this Website but you can certainly look into the
[email protected] for further help.
They have group of experts working on the Taxation and Legal side.

They are also specialised in NRI Taxation and FEMA act
which I used and found very professional. Of course their charges are not exhorbitant but would be wise to visit them once you are in Mumbai. Cheers

Hello Damodhar ,

I meant i found out your reply so late actually

but it applies the other meaning as well , you are right !

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