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Should USA based nris need to report indian property under fatca

Revealed: Should USA based NRIs need to report Indian property under FATCA?

by Holistic Leave a Comment

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Are you an NRI – owning property in India? Are you worried about reporting the Indian property under FATCA?

Returning Nri

The FATCA (Foreign Accounts Tax Compliance Act) implementation by the US Federal Government has forced some of the Non-Resident Indians to sell off their properties in India due to the fear of being questionable on disclosing the concerned properties, the tax levied and penalties charged by the IRS.

The anxiety caused is due to the lack of knowledge and false information spread by halfwits. We will discuss the true motive of FATCA in this article.

The objective of FATCA forUS-based NRI

The objective of FATCA is to track down the taxpayers in the US who evade tax levitation by avoiding their worldwide income. The law differs with respect to the nature of property as we know are Movable property and Immovable property. As an NRI, you can avail certain limited tax exemptions on the immovable property through DTAA (Double Tax Avoidance Act).

Assets to be reported in Form 8938 — FATCA

As an NRI residing in the US, the asset types that you need to report in Form 8938 of FATCA are mostly movable properties or financial products mentioned below.

  • Deposit and Custodial deposit accounts in Foreign Financial Institutions.
  • Foreign mutual funds, hedge funds.
  • International stocks or securities apart from a bank account or a financial account.
  • Annuity contracts and foreign life insurance schemes.
  • Interest income from foreign partnership institutions.

Assets not required to be reported in Form 8938 — FATCA

You need not report the following assets you own in India in Form 8938 of FATCA.

  • Any foreign currency which is not held in a financial institution, but as in the form of a liquid currency is not necessary to be reported. If the foreign currency is held in a Foreign Financial Institution, then it must be reported as said earlier.
  • Collectibles like art, antiques, jewellery, and cars that are held in a foreign country need not be reported as foreign financial assets.
  • Safety deposit box held in a foreign financial institution need not be reported as a foreign financial asset.
  • Immovable property owned in India need not be reported in Form 8938. But there is an exception for this property under certain criteria.

Exceptions for Real-estate (immovable) property in Form 8938 — FATCA

If you own a real estate property in India then you need not report that in the Form 8938. It includes any personal residence or a rental property owned individually. But this is not the case if,

An immovable property held through a foreign entity such as a corporation, trust, or partnership comes into reporting foreign financial asset if the total value of your specified foreign financial asset is greater than the reporting threshold limit of IRS. (The reporting threshold limit is greater than $50,000 on the last year or greater than $75,000 at any time during the year)

Effects of FATCA on Indian property

FATCA does not have any direct effect on your real-estate property in India. But the FATCA will not completely replace the terms of DTAA. Article 6 of DTAA clearly mentions that,

  • US nationals who hold immovable property in India are accountable to tax by the Indian Government on any income arising from the same.
  • Indian nationals who hold immovable property in the US are accountable to tax by the US Government on any income arising from the same.

Conclusion

The FATCA is established only to track down the tax evasion of income in the US thus income arising from internationally owned immovable property is not a subject to be concerned in the US. So, you don’t have to worry about your property in India until you are paying the tax for that property to the Indian Government.

Even though you pay tax in India for the immovable property, it is also a part of the US worldwide income and must also be declared when filing US taxes. However, DTAA gives credit for the tax you paid in India when filing income tax in the US. Just to make sure that you do not pay tax twice for the same income.

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Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
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Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews.

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