What currency is held in NRE Account

Money deposited in NRE banks is deposited in INR only.

Does money transferred to NRE account gets converted to INR?

Yes, it will be converted to INR based on applicable conversion rates and fees charged by your bank. If you use direct bank method to transfer money from foreign bank account to Indian NRE account, you end up paying good conversion fees. This can be negotiated with the bank and your relationship manager or branch manager can help you get the best deals. But if you use services like Wise, you will directly send INR only and conversion is taken care by them. I recommend using Wise.

Do i pay currency conversion fees and charges while sending money back from NRE to my foreign bank account?

When you want to transfer back this money to your foreign bank account, you have to pay the conversion charges again.

What is limit of sending money from NRE to foreign bank account?

There is no limit in sending back money from India to your foreign bank account.

Is interest earned on NRE account tax free?

The interest you earn is not taxable in India, but it is important to note that tax is applicable based on your country of residence. Let us say you are in USA, then you will pay taxes just like your normal income.

Also Read : Best way to File USA tax returns as NRI

The post Important points for NRE account appeared first on UrbanMadam.

Important Points

1. NRIs are required to file taxes in their respective country of residence regardless of the country where they earned their income. For example, any interest, rental, capital gain have to be filed in USA.
2. You will only pay interest once on your earned income. If tax is already paid in India, you will not pay the taxes again in USA (Based on DTAA Treaty between USA and India).
3. If tax is already deducted in India and you have paid to Government of India, you need to just declare that income and submit the ITR details. You show the income but do not pay taxes as it is already paid there. Important point is let us imagine you paid 10% tax in India, and you fall under 20% tax slab (Random number for example), you will pay 10% difference in USA.
4. You should declare all the accounts including demat where you have held balance more than 10000 USD (Highest value in Financial Year). This is FBAR filing.

How to File your taxes

If no income in India, you can file your tax return for free :

1. Chime bank offers free tax return filing if you have an account with them. If you do not have, click following link and open for free (Sign Up Chime Bank and Claim referral Bonus of 100 USD)
2. Once your account is active, login to your banking app or website.
3. Navigate to Taxes Section on Home page.
4. Enter your personal details, be ready with :
   • Your Name and name of your Dependents
   • Address
   • SSN for you and your dependents
   • W-2
   • Bank Interests and brokerage Income (Form 1099-INT)
   • Claim deductions for Insurance / Health bills spent out of Pocket)
   • Rent Paid (Only valid for some states, it will ask you if your state is eligible after you provide your address)
   • House Tax receipts (If you own house)
   • Eligible Car Loan details
5. Start providing your details and upload the requested documents when being asked.
6. At the end, chime will tell you the tentative refund (In State and Out of State)
7. Submit and wait for your money.

If you have income in India, follow the below steps :

1. Sign up for Valuestax(Use Referral Code – 143082)
2. For USA income, upload your W-2, 1099-INT, House tax receipts, Rent Details / House Tax receipt, Out of pocket medical expenses including insurance.
3. For India income upload the details of your Form 16 (If available), copy of last financial year ITR.
4. Details of accounts for FBAR filing (Read About FBAR in the article above)
5. Value tax will charge you around 50 USD for complete tax filing.
6. Check the tentative refund value and submit the returns.

Feel free to comment below if you have any questions.

Also Read : Ever got confused if you want to move back to India

The post My personal 100% Legal and Best way to File USA tax returns as NRI (Works free if you only have USA Income) appeared first on UrbanMadam.

I am more than confident that you already have a set bank balance value defined after which you will plan to buy Land in India and do farming. Do not worry, we all are in the same boat.

We Indians being emotional always think with heart, which is not actually bad, but sometimes makes us regret. This is not because your intentions are bad, but it is because you do not have experience of that situation. Think that something similar to making bad decisions of your childhood which seemed to be perfect that time but definitely we will not let our kids do that.

Let us not go with emotional content further, rather let us understand a practical way of thinking. Lets together assume that we have decided to move back to India with 5 Crores INR cash with us.

Here is the future

Your Dreamland for Farming

Every other land you see in India is disputed. Sometimes it is the papers, sometimes it is illegal possession, sometimes tresspassing and sometimes some other stupid thing. Let us assume you are lucky and you get a land for 1 crore and setup boundry and fencing for the safety. Let us say you end up hiring one caretaker for daily needs which costs you somewhere around 5 Lakhs per year. Trust me you are putting a liability as you will have zero returns from his work as he is just a care taker and not a worker growing crops alone for your livelihood.

Let us imagine that you have someone in your family who will be with you to take care for the land and you do not spend anything for maintenance of your dreamland farmhouse. Still to make it running you will spend good money. This purely is individual specific so let us keep it with your wisdom to decide how much you are going to pay for that. But i hope it is not going to be less than 3 Lakhs INR per year. So for your dreamland, let us assume you will have following expense summary.

• Asset Expense 1 – 1 Crore.
• Liability Expense 1 – 3 Lakhs Per Year
• Mental Expense 1 – Trouble of buying and maintaining a land withuot any external influence.

Your Food , Sorry I mean your Health

For food I am not going to compare costs at all. After living out of India, I am 100% sure you will be least bothered spending few extra bucks for good product. But I challenge you even after spending 2 times extra, you will not be able to find anything good.

Water is bad, Air is bad, Food adulteration is at its peak. Forget about day to day food. Even Prasad being prepared in Tirupati is adulterated. Just because you have a false ego of returning back to your hometown so that you can sit and gossip with your friends, this does not give you any reason to force your kids to go with you and suffer with all this. Imagine someone takes you to 10 levels below what you ate in your childhood.

Your Dream Car

After driving a feature loaded car in USA, definitely you are not going back to drive a compact cost effective vehicle. Again it all depends on individual specific choice, but definitely nothing less than you will expect in your Garage. Moreover, driving a car in USA is less expensive than compared to India. Petrol Costs more than 100 Rs per litre. That is not the end, the following expense also counts :

1. Pollution certificate cost (Yearly)
2. Insurance Cost (Yearly) Comes out to be nearly same. Dont compare what you used to pay for your car before going abroad. That time your car was also different and situation was also different.
3. Fuel Costs based on your driving. Price is literally 60 % more than in USA.
   • $2.5 \div 3.785 \times 90.7 \approx ₹60$ per litre, so ₹100 per litre is (100−60)/60×100≈66.7%(100−60)/60×100≈66.7 more expensive.
4. Toll Tax

So if you drive generously with standard average of 30 Km per day, the average monthly cost comes to be 10000 INR per month, which is around 1.2 Lakhs per year.

• Asset Expense 2 – 25 Lakhs
• Liability Expense 2 – 1.2 Lakhs Per Year
• Mental Expense 2 – Traffic, Traffic sense, stress of road rage, parking cost whereever you go.

Your Children Education

Here you pay taxes and you get world class education for free. I know we all have a dream of buying a farmland. But you will compromise the education. Then you will wake up and relocate to a place where you can get your children better education. Education is a scam in India. Education itself is expensive in India. Being a NRI kid your kid will get comparatively more fees requirements as well. Just google up the expenses, but trust me if you sum up School fees with Uniforms, Transport, Extra curricular etc you are not getting anything lesser than 6 Lakhs per year.

• Asset Expense 3 – Reservation, Lack of opportuities
• Liability Expense 3 – 6 Lakhs Per Year
• Mental Expense 2 – Stress of making your kids successful will haunt you forever.

You pay higher costs & Deductibles is for Insurance

I agree if you go and get treatment for common cold it makes you feel looted, but just imagine in your whole life how much such instances you will see. Imagine a situation that you eat adulterated paneer whole of your life, Drink water which has Radio active elements, Have AQI not less than 200, will you end up getting this much small health problems. I am sure anyone who is not mentally prepared will see a surprise once he gets some critical illness. Then comes insurance into picture. Let us assume the expense you have to pay at hospital is 20 lakhs, In India, you will end up paying 15 lakhs as Insurance deductible was 5 lakhs. I hope you get this sarcasm. I am sure all NRI readers will understand. But if you are Indian and reading this article, let me tell you deductible is your maximum limit what you pay during one year for your treatment.

I am sure if you compare cost for health treatment, you compare it in regards to Purchasing Power Parity. Spending 10 lakhs for treatment if your annual income is 1 Crore is 10% of your annual income. Whereas, spending 10 lakhs for your medical treatment when annual income itself is 10 lakh is 100% of your annual income.

Corruption

I am sure you never paid anything extra to anyone for getting any Government benefit outside India. Trust me you cannot even get a Drivers license easily in India.

Tax is charity in India

You pay Income tax, then GST, then Toll tax, This tax, that tax. But what do you get at the end. I am sure you are not getting even a single dollar benefit from government for which you are not paying. Do not say Roads, Fly Overs hospitals. You pay road tax for them and some one says it is for National Highways then ask them for what toll is then.

World Class technology for collection and Worst technology if Government has to do something for people

Where Government wants money from people, they have world class technology. Like your speed camera will never fail to record even one miss. It will never happen that you overspeeded once your life and cameras were down that day. Moreover they can even identify the phone you are using in your car because they want to send you collection bill. But if you need cameras for safety concerns then those do not work. If they work, they are nothing more than time stamping devices that just tell the time of the crime.

I can write countless things with never ending article, but I will leave the further though provocation to you guys, But do not forget : I added some expenses up for you. Now you add up the remaining ones and see your situation.

Also Read : Never sell your property in India without this advise.

The post Ever got confused if you want to move back to India ? Let us read this and India looks like a Scam appeared first on UrbanMadam.