International Taxation: NRI Advisory, FEMA, DTAA, and Cross-Border Structuring
Cross-border tax obligations are one of the most compliance-intensive areas of Indian tax law. An NRI with rental income in India, a software professional working abroad with Indian investments, or an expatriate deployed to India on a project each face a different set of reporting requirements. Missing FEMA deadlines, failing to report foreign assets, or incorrectly applying DTAA rates can result in penalties that exceed the tax itself.
The firm advises on international taxation matters for NRIs, expatriates, and businesses with cross-border transactions.
NRI Taxation
NRI taxation in India is governed by the residential status rules under the Income Tax Act and the applicable DTAA. Common compliance areas include:
- Taxation of rental income from Indian property
- Capital gains on sale of Indian assets (shares, property, mutual funds)
- TDS on payments to NRIs under Sections 195 and 195A
- Determining residential status for each financial year
- Filing ITR for NRIs with Indian-source income
- Claiming DTAA benefits to avoid double taxation
FEMA Compliance
The Foreign Exchange Management Act governs all cross-border financial transactions for Indian residents and NRIs. The firm handles FEMA compliance for:
- Opening and maintenance of NRO, NRE, and FCNR accounts
- Repatriation of funds from India to overseas
- Compliance for overseas direct investment (ODI) by Indian residents
- Reporting of foreign assets and foreign income in the ITR
- FEMA compliance for foreign inward and outward remittances
Double Taxation Avoidance Agreement Advisory
India has DTAAs with over 90 countries. These treaties determine which country has the right to tax specific types of income and at what rate. The firm advises on DTAA application for salary income, dividends, interest, royalties, and capital gains, ensuring that treaty benefits are properly claimed and that foreign tax credits are available in the resident country.
Transfer Pricing
Transfer pricing regulations under Sections 92 to 92F apply to international transactions between associated enterprises. The firm provides transfer pricing advisory for:
- Benchmarking analysis and documentation for international transactions
- Compliance with transfer pricing reporting requirements (Form 3CEB)
- Advance pricing agreement (APA) and safe harbour provisions
Expatriate Taxation
Expatriates working in India face complex tax situations involving split-year taxation, tax equalisation, and DTAA application. The firm advises expatriates on Indian tax obligations, assists with tax return filing, and coordinates with their home country tax advisors to ensure compliance in both jurisdictions. Services include structuring compensation packages to minimise overall tax burden, handling social security (PF) obligations, and managing repatriation of earnings.