Can my wife buy Euros from my NRO funds?

Name withheld on request

Under the Exchange Control Act, a person can remit outside India up to $1 million per financial year from an NRO account, subject to payment of applicable taxes in India.

Accordingly, you can buy Euros with the funds in your NRO account in India as the account is in your name. However, your wife will not be able to buy Euros from your account.

I am 45 years old and working with FMCG major. I’m moving to France for a job as a consultant for the next few years. What would be the tax implications of being a foreign consultant? Can I reduce my tax liability by following the tax rules in India?

Name withheld on request

The taxability of your income in India will depend on the following:

a) residential status

b) source of income

c) place of receipt of income

A person who qualifies as ‘resident and ordinarily resident (ROR)’ is taxable on worldwide income and is required to report his assets outside India in his income tax return.

However, if the person qualifies as ‘Non-resident (NR)’ or ‘Resident but not ordinarily resident (NOR)’ then only India source income (i.e. income earned or received in India) is taxable.

Residential status is determined on the basis of physical presence of a person in India during one financial year (FY) and the preceding 10 financial years. Housing status is dynamic and requires new determinations each year.

In your case, you will first need to determine your residential status in India. If you qualify as RoR, then your overseas consultancy income will be taxable in India. However, if you qualify as NR/NOR, the foreign consultancy income will not be taxable in India unless it is received directly in a bank account in India or is received from an established profession in India. The benefit can be claimed under the Double Taxation Avoidance Agreement (DTAA) between India and France.

Sonu Iyer is the Tax Partner and People Advisory Services Leader at EY India.