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Forex over $10,000 coming into India has to be declared

Import in kind of articles and equipment are governed by the Baggage Rules under the Customs law

Q. I work in Singapore. I wanted to know how much, in cash and in kind, can I bring into India without inviting tax?

Expert Comment: Under the Foreign Exchange Management (Export and Import of Currency) regulations, 2000, you are allowed to bring into India foreign exchange (forex) without any limit.

However, if the aggregate value of the foreign exchange in the form of bank notes or traveller’s cheques brought in exceeds $10,000 or its equivalent and/or the value of foreign currency notes alone exceeds $5,000 or its equivalent, a declaration should be made to the customs authorities in the currency declaration form.

Import in kind of articles, equipment and so on are governed by the Baggage Rules under the Customs law and would depend upon various factors such as the nature of articles being brought into India, your purpose of visit abroad, and others. As such, mere import of cash into India should not make it taxable. The taxability would depend upon factors such as nature of income, your residential status in India for tax purposes, provisions of the applicable tax treaty, etc. You may consult your tax advisers to determine the tax treatment of money brought into India.

Q. I live in Malaysia and want to sell my property in Mumbai. If I sell it to a non-resident Indian (NRI), can the deal be worked out in foreign currency?

Expert Comment: It should be possible to denominate the consideration for sale of the property to an NRI in foreign currency. Any gain arising from sale of property situated in India would be taxable as long-term capital gain (LTCG) if the property has been held by you for more than 36 months. If the duration is shorter than 36 months, short-term capital gains (STCG) tax will apply. LTCG is taxable at 20% plus applicable surcharge and cess. STCG is taxable at 30% plus applicable surcharge and cess.

In computing the tax, the income expressed in foreign currency will have to be converted into Indian rupee using the telegraphic transfer buying rate adopted by State Bank of India for buying such foreign currency as on the last day of the month immediately preceding the month in which the property is transferred.

Assuming that you are a tax resident of Malaysia and an NRI for tax purposes, you could examine the possibility of claiming credit for taxes paid in India against the taxes payable in Malaysia under the India-Malaysia Double Taxation Avoidance Agreement.

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