Will probated in the US not recognised in India

Sandeep Shanbhag, the highly respected investment guru, and his son Sandeep Shanbhag, answer your questions on NRI investment.

A Rediff India Abroad feature:

I acquired United States citizenship recently. I have a Non-Resident Ordinary rupee account in India where all my savings are deposited. Can this money be transferred to the US?

-- Ved Gupta

A person who maintains his Indian passport and Indian citizenship is termed a Non Resident Indian. An Indian who has given up his Indian citizenship for the citizenship of another country is termed a Person of Indian Origin. The rules and regulations for NRIs and PIO are largely the same.

The Reserve Bank of India Master Circular 04/2008-09, dated July 1, 2008, makes it possible for an NRI or a PIO to remit as much as $1 million per calendar year for bona fide purposes out of the sale proceeds of assets held in NRO accounts. S/he should have acquired the assets in question out of rupee resources when s/he was in India or by way of legacy/inheritance from a person who was a resident in India.

The following funds/assets are eligible for remittance:

a. Sale proceeds of immovable property.

b. Assets acquired by way of inheritance/legacy.

c. Deposit with a bank or a firm or a company.

d. Provident fund balance or superannuation benefits.

e. Amount of claim or maturity proceeds of insurance policy.

f. Sale proceeds of shares and securities.

g. Any other asset held in India, in accordance with the Foreign Exchange Management Act.

The remittance can be effected only when it is sought for all bona fide purposes to the satisfaction of the authorised dealer (bank). An undertaking by the remitter and certificate by a chartered accountant in the format prescribed by India's Central Board of Direct Taxes vide their Circular 10/2002 dated October 9, 2002 has to be produced.

It is necessary to file Form-A2, a declaration by the individual and a certificate from an accountant, and undertaking for payment of income tax, in the specified format. A No-Objection-Certificate from the income tax department will be useful, but not necessary.

You will have to approach your bank in India for the procedural details which differ from bank to bank.

I have written my will in New Jersey with two signatures from witnesses (not notarized). In it I have bequeathed a flat in Kolkata to my wife. In case we both die, the flat is bequeathed to our children who are US citizens. If the will is probated here, will it be honored in India? It is a question of jurisdiction. When the real property is in India, how should the will be written?

-- Amit K Saha

Yes, a will probated in the US will not be recognised in India due to jurisdiction issues. To be on safe side, get the same probated in India also.

From some of your replies I understand that NRIs cannot have regular account in any bank in India. In my case, I retired from the Indian federal government in 1985 and my pension is being regularly credited to my account in the bank. I came to the US in 1995 and became a US citizen in 2007. Kindly advice as to how I can keep my pension account in India. There are no other deposits or transactions in this account except pension.

-- Shamsher Saxena

As per the existing legislation, you should write to the bank requesting them to re-designate this account as a Non-Resident Ordinary account. You can continue to receive the pension in such an NRO account.

I am leaving America for good. How should I go about getting my social security in India?

-- Milan S Parange

We do not see any problem in you arranging for remittance of this money from your bank in the US to your Indian bank. Also note that as per the Double Tax Avoidance Agreement between India and the US, social security receipts will be taxable only in the US and not in India.

I am a senior citizen and my son is settled in the US. He has built a house in Bangalore which is given on rent. Besides this, he does not have any income in India. Since my son is not in India, I being a power of attorney holder filed his return as his representative and went to submit to the tax office, where I was asked the name and address of the auditor without which I was told that return would not be accepted. Is it mandatory to provide this information?

-- G T Jadeja

Since your son is not in India, you can file a tax return on his behalf as his representative assessee. There is a specific space in the form where the information regarding representative assessee can be provided. As an individual, your son does not require an auditor for any purpose and there seems to have been some misunderstanding on the behalf of the tax authorities regarding this.