Q.1135 Repatriate sale amount from inherited securities to the US
Question: I expect to inherit a multi-million dollar securities account from my father in India. The securities (stocks) were purchased by my (very elderly) father and will be left to me. How can I repatriate the money from sale of these securities via my NRO account where proceeds of sale will be deposited? I realize I can repatriate dividends and interest (current income) upto a limit of $ 1 million annually from my NRO account. What can I do to repatriate capital amounts from sale of these stock market securities? I would appreciate any guidance on the matter. Thank you. ***** (Please keep my name confidential if you post the answer to your website) Answer: Actually NRI’s can repatriate all current income like dividends, interest, rent, mutual fund income without any limit as long as taxes have been paid. However, sale proceeds of shares is not in the nature of current income, so the Reserve Bank of India restriction to transfer up to a maximum of 1 million US$ would apply. The one million restriction applies as per financial year. In India the financial year is April to March. Depending on when funds are transferred, a person may not have to wait a full year to transfer more than 1 million dollars. So far there is no tax on inheritance in India. Only when the inherited assets are sold by the heirs, tax comes into play. As for securities, there is no tax implication on receipt of shares through a Will. The shares can be sold with the help of a stock broker. Taxes would depend on when your father bought the stocks as period of holding determines whether a gain is short or long term. Get a chartered accountant to help you with the tax formalities and issue the required certificate to facilitate repatriation. As mentioned above, the RBI one million US$ limit per financial year will apply. Note: • After getting many requests from people to remove their names once their questions were posted and answered on the website, I discontinued the practice of posting names some time back. • Answers to questions received are posted on the website only. The reason being that other visitors of the website who may have similar questions can also benefit.
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Q.1135 Repatriate sale amount
from inherited securities to the
US
Question: I expect to inherit a multi-million dollar securities account from my father in India. The securities (stocks) were purchased by my (very elderly) father and will be left to me. How can I repatriate the money from sale of these securities via my NRO account where proceeds of sale will be deposited? I realize I can repatriate dividends and interest (current income) upto a limit of $ 1 million annually from my NRO account. What can I do to repatriate capital amounts from sale of these stock market securities? I would appreciate any guidance on the matter. Thank you. ***** (Please keep my name confidential if you post the answer to your website) Answer: Actually NRI’s can repatriate all current income like dividends, interest, rent, mutual fund income without any limit as long as taxes have been paid. However, sale proceeds of shares is not in the nature of current income, so the Reserve Bank of India restriction to transfer up to a maximum of 1 million US$ would apply. The one million restriction applies as per financial year. In India the financial year is April to March. Depending on when funds are transferred, a person may not have to wait a full year to transfer more than 1 million dollars. So far there is no tax on inheritance in India. Only when the inherited assets are sold by the heirs, tax comes into play. As for securities, there is no tax implication on receipt of shares through a Will. The shares can be sold with the help of a stock broker. Taxes would depend on when your father bought the stocks as period of holding determines whether a gain is short or long term. Get a chartered accountant to help you with the tax formalities and issue the required certificate to facilitate repatriation. As mentioned above, the RBI one million US$ limit per financial year will apply. Note: • After getting many requests from people to remove their names once their questions were posted and answered on the website, I discontinued the practice of posting names some time back. • Answers to questions received are posted on the website only. The reason being that other visitors of the website who may have similar questions can also benefit.
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