Hello , I am a software engineer working in Malaysia since June 2014. I am filing Income tax return as a NRi since last 4 financial years . I am maintaining NRE and NRO accounts in India . I am planning to quit my present job and return back to India on June 2019 . I have saved a fairly large portion of my salary in my savings salary account in Malaysia . When I return back to India I do not want to transfer the money from Malaysian account to my Indian account immediately . I want to keep the Malasysian account open for next 2-3 years and in between I want to transfer the amount to India. My questions are :- 1. Can I maintain the Malaysian salary account after returning to India ? If yes , for how many months/years? 2. If the answer of Question #1 is yes , then when I transfer the money to India , maybe after 2 years , will the entire amount be taxed ? For example , If I transfer 100k Malaysian Ringgit to Indian account on 2020-21 ,will the entire Indian amount of approximately 16 lakhs be taxed ? Regards, Ritwik Bhattacharyya
Hi
No tax is to be paid on repatriation of Funds . Since you already have paid taxes on that earning in Malaysia ,now on bringing back it to India,no tax is to be paid.
when you will leave Malaysia,your residential status will change there,i think you have to check this out with Malaysia banking practice.
Hope it helps
Hi Ritwik,
The process of bringing back income to India from an overseas destination does not determine taxability.
It is your residential status that determines your taxability of income.
You had earned income overseas when you were a non -resident and have already paid taxes on such income abroad, merely bringing the funds to India will not attract income tax.
A person resident in India may maintain a foreign currency account outside India if he had opened it when he was resident outside India or inherited it from a person resident outside India. There is no bar on maintaining foreign bank account. However, be mindful when you become ordinarily resident in India, you may be required to disclose the foreign account details in tax return form. This needs to be analysed while filing India tax return.
THE taxability is in the year in which income is earned. Mere remittance from Malaysia is not taxable in India. However, if you have made remittance from abroad, the tax department can question the source and you need to explain the matter with supporting. You need to justify the salary income earned in past and not taxable in INDia.
Dear Sir,
Please find below the responses:
1. Yes, you can maintain the foreign bank account.
However, you need to report the same in ITR filing in India-Details of foreign bank accounts.
2. No, Under the act, incidence of tax on a tax payer depends on his residential status and also on the place of accrual or receipt of income.
In your case, there is no tax on account of transferring money to a NRE or savings account in India, provided the amount is earned and accrued for outside India.
You won't be taxed while bringing the amount back to India as you have earned it when you were NRI and it was taxed in the respective country and now you are just repatriating same so no tax is to be levied however after becoming a resident of you still maintain that bank account you need to provide its details in your ITR as it will be foreign asset also the interest you earn out of such account will be taxed in India.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
1. Not sure in this part. Anyone from regulatory background may be able to guide you.
2. No, the amount will not be taxable.
