July 11, 2015
https://www.facebook.com/mehtarahulc/posts/10152904914791922
Achchhe din for NRIs / PIOs : NaMo may soon order India's banks to give details of deposits / interest earned by NRIs and may order State Govt to give information on land owned by NRIs to Govt of USA . And that may enable Gov-USA to impose VERY HEAVY fines if NRIs etc had not disclosed the wealth / interest earned in their income tax returns filed in USA.
.
And US income tax law has 10 years imprisonment for hiding assets / income in foreign country. And the income tax law applies on US citizens as well as green card holders. Using threat of prison, GovUSA is known to extract serious extra penalties.
.
Lets understand the law first.
.
Consider an Indian citizen living in USA. In theory, he has to pay income tax in India as well as USA, but income tax payable in India is officially and legally zero. WHY? Say an Indian citizen in USA earns $200,000 / year. Then income taxes he would have to pay will be around 40% i.e. $80,000. Now tax rate in India is 33%. And so he has to only pay the difference , which is -7% (minus seven percent) which is zero.
,.
But consider a US citizen living in India. Say he earned Rs 1 crore in India. Then he has to pay tax of 33% in India, and then he has to pay tax of (40% - 33% = 7%) in USA.
.
And I have to check, but this law also applies on green card holder !! So if a GC holder earns Rs 1 crore in India, then he has to pay taxes in USA !!! There is exemption of US$ 90,000 of US citizens and NRIs living outside USA amd earning outside USA. So NRIs with small income dont need to pay tax, but they do need to file income tax return, and not filing return carries very very heavy fines and prison sentence !! Please note --- I dont know the extent to which law will apply on GC holders.
.
IOW, since USA's income tax rate is higher, the US citizens earning in India have to pay a small tax in USA. And if they didnt pay, then fines are serious and they may also land in prison.
.
Many NRIs / PIOs have deposits / land in India, And most NRIs / PIOs didnt disclose this in US tax returns. In some case, there will be unpaid taxes due. In some case, Now NaMo may give all related information to GoUSA.
.
NaMo may order banks to give informatipon start 1-jan-2010 !! In such case, fines can be huge.
.
One key difference between USA's income tax laws and India's income tax laws , for individuals, is that in India, fine is only on taxes unpaid and fined for non-disclosure, if it doesnt create any unpaid tax, is negligible. In India, companies are liable for non-disclosure. But individuals arent fined for non-disclsore.
.
eg consider a green card holder in USA. Say he is living in India and has no income in USA. Say his income in India is below $90000 . Then taxes to be paid in USA are zero. But if he doesnt disclose the income and doesnt file the return , then there are serious fines of the order of $200,000 and prison sentence of upto 10 years. USG is notorious to use threat of prison sentence to extract cash. And USG is lenient for US citizens, but cracks down heavily on immigrants
.
=====
.
Till now, USG could not do much as it had no information on income / wealth of NRIs / PIOs in India.
.
Now NaMo may soon order ALL banks in India and all state govt in India to give information of deposits and land owned to US Gov? And USG will do revserse.
.
But India will benefit nothing from information of USG, because income tax rate in India is lower and since person would have already paid taxes in USA , the taxes payable in India will be zero. And fines in India for non-disclosure are near zero. So information India gets from USA will not benefit India much.
.
While information NaMo will give to US-Gov will be like setting cat in room full of pigeons. Lakhs of NRIs have deposits in India. And GoI doesnt charge any tax on the interest earned !!! ( most NRI deposits are tax free). So they are liable to pay FULL income tax in USA, and most do not pay !!! Worse, many PIOs who are US citizens but living in India and earning in India , but not earning anything in USA havent even filed US tax returns. They will now have to pay serious fines.
.
All in all, it is achchhe din for Gov-USA and "achchhe din" for PIOs / NRIs !!!
.
====
.
Many like myself have been airing for weeks that NaMo should NOT sign this agreement. And if NaMo has to sign, then it should be with following riders that
.
1. There will no penalty on PIOs / NRIs for mere non-disclosure between 1-jan2010 to 1-jan-2017
.
2. The penalty for unpaid taxes on income earned in India between 1-jan-2010 to 1-jan-2017 will be 3% pa only (3% is very high rate on US$
.
But NaMo refused to add above two clauses in the US-India agreement. So now achchhe din for NRIs and PIOs may begin soon.
.
====
.
Why did NaMo refuse to add above two clauses? Ask NaMo or his authorized certified andhbhagat. My guess is --- US-elitemen have invested hundreds of crores of rupees after paidmedia in India. And so they own much of the paidmedia in India. And so NaMo has to fear from them, and keep their demands.
.
====
.
Solution I propose is :
.
NRIs / PIOs should openly ask, via newspaper advt , NaMo / GoI to add following two clauses in Indo-USa agreement
.
A. There will no penalty on PIOs / NRIs for mere non-disclosure between 1-jan2011 to 1-jan-2017
.
B. The penalty for unpaid taxes on income earned in India before 1-jan-2011 will be zero, and penalty on unpaid taxes on income earned between 1-jan-2011 to 1-jan-2017 will be 3% pa only (3% is very high rate on US$)
.
Using newspaper advt , they can take the cause forward.
.
https://www.facebook.com/mehtarahulc/posts/10152904914791922
Achchhe din for NRIs / PIOs : NaMo may soon order India's banks to give details of deposits / interest earned by NRIs and may order State Govt to give information on land owned by NRIs to Govt of USA . And that may enable Gov-USA to impose VERY HEAVY fines if NRIs etc had not disclosed the wealth / interest earned in their income tax returns filed in USA.
.
And US income tax law has 10 years imprisonment for hiding assets / income in foreign country. And the income tax law applies on US citizens as well as green card holders. Using threat of prison, GovUSA is known to extract serious extra penalties.
.
Lets understand the law first.
.
Consider an Indian citizen living in USA. In theory, he has to pay income tax in India as well as USA, but income tax payable in India is officially and legally zero. WHY? Say an Indian citizen in USA earns $200,000 / year. Then income taxes he would have to pay will be around 40% i.e. $80,000. Now tax rate in India is 33%. And so he has to only pay the difference , which is -7% (minus seven percent) which is zero.
,.
But consider a US citizen living in India. Say he earned Rs 1 crore in India. Then he has to pay tax of 33% in India, and then he has to pay tax of (40% - 33% = 7%) in USA.
.
And I have to check, but this law also applies on green card holder !! So if a GC holder earns Rs 1 crore in India, then he has to pay taxes in USA !!! There is exemption of US$ 90,000 of US citizens and NRIs living outside USA amd earning outside USA. So NRIs with small income dont need to pay tax, but they do need to file income tax return, and not filing return carries very very heavy fines and prison sentence !! Please note --- I dont know the extent to which law will apply on GC holders.
.
IOW, since USA's income tax rate is higher, the US citizens earning in India have to pay a small tax in USA. And if they didnt pay, then fines are serious and they may also land in prison.
.
Many NRIs / PIOs have deposits / land in India, And most NRIs / PIOs didnt disclose this in US tax returns. In some case, there will be unpaid taxes due. In some case, Now NaMo may give all related information to GoUSA.
.
NaMo may order banks to give informatipon start 1-jan-2010 !! In such case, fines can be huge.
.
One key difference between USA's income tax laws and India's income tax laws , for individuals, is that in India, fine is only on taxes unpaid and fined for non-disclosure, if it doesnt create any unpaid tax, is negligible. In India, companies are liable for non-disclosure. But individuals arent fined for non-disclsore.
.
eg consider a green card holder in USA. Say he is living in India and has no income in USA. Say his income in India is below $90000 . Then taxes to be paid in USA are zero. But if he doesnt disclose the income and doesnt file the return , then there are serious fines of the order of $200,000 and prison sentence of upto 10 years. USG is notorious to use threat of prison sentence to extract cash. And USG is lenient for US citizens, but cracks down heavily on immigrants
.
=====
.
Till now, USG could not do much as it had no information on income / wealth of NRIs / PIOs in India.
.
Now NaMo may soon order ALL banks in India and all state govt in India to give information of deposits and land owned to US Gov? And USG will do revserse.
.
But India will benefit nothing from information of USG, because income tax rate in India is lower and since person would have already paid taxes in USA , the taxes payable in India will be zero. And fines in India for non-disclosure are near zero. So information India gets from USA will not benefit India much.
.
While information NaMo will give to US-Gov will be like setting cat in room full of pigeons. Lakhs of NRIs have deposits in India. And GoI doesnt charge any tax on the interest earned !!! ( most NRI deposits are tax free). So they are liable to pay FULL income tax in USA, and most do not pay !!! Worse, many PIOs who are US citizens but living in India and earning in India , but not earning anything in USA havent even filed US tax returns. They will now have to pay serious fines.
.
All in all, it is achchhe din for Gov-USA and "achchhe din" for PIOs / NRIs !!!
.
====
.
Many like myself have been airing for weeks that NaMo should NOT sign this agreement. And if NaMo has to sign, then it should be with following riders that
.
1. There will no penalty on PIOs / NRIs for mere non-disclosure between 1-jan2010 to 1-jan-2017
.
2. The penalty for unpaid taxes on income earned in India between 1-jan-2010 to 1-jan-2017 will be 3% pa only (3% is very high rate on US$
.
But NaMo refused to add above two clauses in the US-India agreement. So now achchhe din for NRIs and PIOs may begin soon.
.
====
.
Why did NaMo refuse to add above two clauses? Ask NaMo or his authorized certified andhbhagat. My guess is --- US-elitemen have invested hundreds of crores of rupees after paidmedia in India. And so they own much of the paidmedia in India. And so NaMo has to fear from them, and keep their demands.
.
====
.
Solution I propose is :
.
NRIs / PIOs should openly ask, via newspaper advt , NaMo / GoI to add following two clauses in Indo-USa agreement
.
A. There will no penalty on PIOs / NRIs for mere non-disclosure between 1-jan2011 to 1-jan-2017
.
B. The penalty for unpaid taxes on income earned in India before 1-jan-2011 will be zero, and penalty on unpaid taxes on income earned between 1-jan-2011 to 1-jan-2017 will be 3% pa only (3% is very high rate on US$)
.
Using newspaper advt , they can take the cause forward.
.
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