There’s no tax implication on receipt of shares through will
At present there is no tax on inheritance in India.
Q. I work in a multinational company in Singapore since 10 years. I received 5,000 shares through my mother’s will in December 2012. These shares were acquired by her more than 15 years back. How can I liquidate the same and remit the FUNDS to Singapore? What will be the Indian tax implications on receipt of shares, profit on sale of the shares and remittance of sales proceeds to Singapore?
Expert Comment: The shares received by you represent a long-term capital asset since the period of holding by your mother will also be included. There is no tax implication on receipt of shares through a will since at present there is no tax on inheritance in India. You can sell the shares through a stock BROKER on any of the recognized stock exchanges, which would be a transaction chargeable to securities transaction tax. The gains pursuant to such sale would be long-term capital gains, which are exempt from income-tax. An NRI can repatriate all current income such as dividend, interest, rent or income from mutual funds after paying due taxes without any limit. However, proceeds on sale of shares is not in the nature of income on the current account. At present, there is a limit of $1 million per financial year (April to March) for remittance of funds outside India by an NRI on capital account. In your case, the entire sales proceeds to Singapore falls within the limit and hence you can remit the entire amount. There is no tax liability on remittance made outside India. You would need a chartered accountant’s certificate in Form 15CB certifying that there are no pending income-tax dues on the amount proposed to be remitted which has to be submitted to the bank to enable them to make the remittance.
Q. I get my salary in Singapore in dollars and pay my tax there. But my company paid me a referral prize and performance bonus of Rs.1 lakh in India. Do I have to pay a tax on it in India?
Expert Comment: It is assumed that you are a tax resident of Singapore and a non-resident Indian (NRI) for the purpose of Indian taxation. The income of an NRI which is liable to tax in India is income which is either received in India or which accrues or arises in India. Hence, the referral prize and performance bonus of Rs.1 lakh is liable to tax in India as salary income. This income will be added to your other income liable to tax in India (if any) and tax computed thereon. You will also get the benefit of the threshold exemption of Rs.2 lakh, which means if your total income in India is below Rs.2 lakh, there would be no income-tax payable.