Home / Practices / Pravasi Desk · Diaspora

FOR NRIs, OCIs, AND THE INDIAN DIASPORA

Pravasi Desk · Diaspora.

For NRIs and the Indian diaspora globally. Form 13 Lower Deduction Certificate for property sales, RNOR optimisation, USD 1 million repatriation, Double Taxation Avoidance Agreement and Foreign Tax Credit, NRI Income Tax Returns, and estate planning across cross-border holdings.

01 · What we do

Our work in this practice

The Pravasi Desk addresses the comprehensive tax, regulatory, and structural issues facing Non-Resident Indians, Overseas Citizens of India, and the broader Indian diaspora. The taxpayer profile is distinct from resident Indian individuals: NRIs are subject to a different residential status framework under Section 6 of the Income Tax Act, different income inclusion rules, different rates of TDS on Indian-sourced income, and a different framework under FEMA for asset ownership, capital flows, and repatriation.

Form 13 Lower Deduction Certificate is the principal mechanism for NRIs disposing of Indian immovable property to avoid the punitive 20% to 30% TDS rate applicable under Section 195. The buyer is required to deduct TDS at the higher rates unless a Form 13 Certificate from the Assessing Officer specifies a lower rate. The application must be filed 2 to 3 months before the transaction, supported by fair market valuation, cost basis with indexation calculation, capital gains computation, and proof of reinvestment or capital gains tax payment intent.

Resident but Not Ordinarily Resident (RNOR) status under Section 6(6) provides a transitional tax regime for individuals returning to India after extended periods abroad. The RNOR window is typically 2 to 3 financial years post-return, during which foreign-sourced income (other than business income from a business controlled in India) is not subject to Indian taxation. Strategic planning around the RNOR window — including the timing of return, realisation of foreign capital gains, timing of foreign retirement account distributions, and structuring of pre-return wealth — can produce material tax savings.

USD 1 million repatriation from NRO accounts to NRE or overseas accounts is permitted under the Liberalised Remittance Scheme provisions for NRIs, subject to Form 15CA and Form 15CB certification. Form 15CB is the Chartered Accountant's certificate certifying the tax position on the remittance, including income source, applicable tax treaty position, TDS compliance, and supporting documentation.

DTAA claims are central to NRI tax planning. India has tax treaties with over 90 jurisdictions, each with specific provisions on permanent establishment, business profits, dividends, interest, royalties, capital gains, employment income, pensions, and Foreign Tax Credit. The taxpayer is entitled to the lower of the domestic rate or the treaty rate, supported by a Tax Residency Certificate from the home jurisdiction, Form 10F, and underlying documentation.

NRI Income Tax Returns require attention to several specific items: residential status under Section 6, income inclusion under Sections 5 and 9 (Indian-sourced income inclusion only for NRIs), TDS reconciliation against Form 26AS, Schedule FA disclosure for foreign assets and investments (not applicable to NRIs but increasingly scrutinised), and special provisions under Chapters XII-A and XII-FA.

Estate planning for NRIs intersects Indian succession laws (Hindu Succession Act, Indian Succession Act, Sharia for Muslims), the home jurisdiction's estate and inheritance laws, the Indian wealth transfer tax position (no estate duty in India since 1985, but gift tax implications under Section 56), and the cross-border probate process. Our practice covers will drafting for Indian assets, HUF structuring, the Private Family Trust framework for substantial holdings, and coordination with home jurisdiction estate counsel.

02 · Who this is for

Client profiles

NRIs with Indian property

NRIs disposing of Indian real estate, requiring Form 13 LDC, capital gains computation, and Section 54 or 54F reinvestment planning to defer or eliminate capital gains tax exposure.

NRIs planning return to India

Individuals planning return within 6 to 24 months, requiring RNOR window planning, foreign asset liquidation timing, and Indian wealth structuring for the post-return resident period.

NRIs with US assets

US-resident or US-citizen NRIs with FBAR, FATCA, Form 8938, Form 5471, and PFIC complications on the US side, intersecting with Indian Schedule FA disclosure and DTAA claims.

Diaspora families with Indian-resident family members

Cross-border family structures requiring coordinated estate planning, gift structuring, and management of HUF or Family Trust frameworks across resident and non-resident family members.

03 · How we engage

Engagement structure

Form 13 LDC for property sales

Capital gains computation, fair market valuation, Section 54 or 54F reinvestment structuring, and the Form 13 application and follow-up. Typical timeline: 8 to 12 weeks.

RNOR window planning

Pre-return advisory covering return timing, foreign capital gain realisation, retirement account distributions, and RNOR optimisation through to RoR transition. Typical horizon: 12 to 36 months.

Annual NRI ITR

Annual filing covering Indian-sourced income, DTAA claims, Foreign Tax Credit, and Schedule FA disclosure where applicable. Routine annual engagement.

Estate planning

Will drafting for Indian assets, HUF and Family Trust structuring, cross-border probate coordination, and integrated estate plan with home jurisdiction counsel.

04 · Representative scenarios

Illustrative engagements

Representative scenario

US-resident NRI selling Mumbai apartment

A US-resident NRI is selling a Mumbai apartment held for 18 years, with the buyer requiring TDS clarity. Considerations: Long-Term Capital Gains computation with indexation (₹2.4 Cr indexed cost against ₹6.8 Cr sale price), Section 54 reinvestment option (purchase of another Indian residential property within 2 years), Form 13 LDC application to reduce TDS from 20% to actual capital gains rate, Form 15CA and 15CB for repatriation, and US tax position on the gain with Foreign Tax Credit claim. Engagement: capital gains computation, Form 13 LDC application, repatriation certification, and US tax position memorandum coordinated with US counsel.

Representative scenario

RNOR planning for returning UK-based founder

A UK-based startup founder is planning return to India in 18 months, with substantial UK assets including ESOPs at vesting, UK pension accounts, and UK property. Considerations: RNOR window planning (2 financial years post-return), optimal timing for ESOP exercise (before or during RNOR), UK pension drawdown timing, UK property disposal timing, and coordination with UK tax counsel for home-jurisdiction position. Engagement: RNOR planning memorandum, return-timing optimisation, in-window structuring, and ongoing annual ITR support.

Representative scenario

Cross-border estate structure for diaspora family

A family with two US-resident children, one UK-resident child, and Indian-resident parents owns substantial Indian real estate, an Indian operating company, and US-based investments. Considerations: cross-jurisdictional estate architecture (will-based versus trust-based), HUF treatment of ancestral property, Private Family Trust framework for Indian operating company shares, US estate tax position post-DTAA, and UK inheritance tax position. Engagement: integrated estate plan, will drafting for Indian assets, Family Trust structuring, and coordination with US and UK estate counsel.

05 · Frequently asked

Questions clients ask

What is the typical timeline for a Form 13 LDC application?

Form 13 applications are typically processed by the Assessing Officer within 30 to 60 days of complete submission, though longer timelines are common in metropolitan jurisdictions. The application should be filed 2 to 3 months before the intended property transaction date. Our practice covers application drafting, supporting documentation, Assessing Officer follow-up, and representation through any clarification rounds.

How is RNOR status determined?

RNOR status under Section 6(6) applies to individuals who satisfy residential conditions in India for 2 out of the 10 preceding financial years and who have been in India for 730 days or more in the preceding 7 financial years. The status is automatically applicable based on physical presence calculations. The window typically applies for 2 to 3 financial years post-return.

Can NRIs claim the USD 1 million repatriation annually?

Yes. The annual USD 1 million repatriation from NRO accounts is permitted for NRIs subject to Form 15CA and Form 15CB certification, underlying tax compliance on income source, and documentation requirements. The limit is per individual NRI, per financial year. Larger amounts may be permitted in specific circumstances with RBI approval where required.

Does India have estate duty or inheritance tax?

India does not currently have estate duty or inheritance tax. The Estate Duty Act 1953 was repealed in 1985. However, gift tax provisions under Section 56(2)(x) apply to certain transfers, with exemptions for transfers between specified relatives. The absence of estate duty makes India a relatively friendly jurisdiction for wealth transfer planning, though home jurisdictions of NRI testators (US, UK) typically have their own estate or inheritance tax regimes.

What is Schedule FA disclosure?

Schedule FA is the foreign asset and investment disclosure required in Indian ITRs for Resident and Ordinarily Resident individuals. It is not applicable to NRIs or RNOR individuals. The schedule discloses foreign bank accounts, foreign investments, foreign immovable property, and foreign trust holdings. Non-disclosure carries significant penalty exposure, increasingly scrutinised through India's information exchange treaties.

Can Advisory Monks coordinate with my US CPA or UK accountant?

Yes. Cross-border NRI matters typically require coordinated advisory between Indian counsel and home-jurisdiction counsel. Our practice routinely operates alongside US CPAs, UK Chartered Accountants, and equivalents in Singapore, UAE, Canada, Australia. Home-jurisdiction counsel typically covers the residential tax position there and the FTC claim on home side; we cover the Indian-side position and integrated DTAA analysis.

Speak with a partner

Tell us about your facts. We will respond with a structured approach.

Each engagement begins with a structured workshop covering your specific facts, timeline, and constraints. We respond with an option analysis and indicative fee within five working days of the initial discussion.

Email a partner WhatsApp