Saving Mantra Blogs

Author: Financial Analyst

  • Current Income in India for NRIs: Tax & Compliance Guide

    Saving Mantra Blog: Current Income in India for NRI – Taxability & Compliance

    NRIs earning current income in India—such as salary, business income, or professional fees—must understand tax implications, TDS obligations, and DTAA provisions. Proper compliance avoids penalties and ensures smooth financial management.

    This guide explains taxability, residential status, TDS under Section 195, DTAA, and reporting requirements for NRIs in India.

    ✔ Step 1: Determine Residential Status

    Residential status under Income Tax Act, Section 6 determines tax liability:

    1. Resident: Stay ≥182 days in India (or other criteria) → Global income taxable
    2. Non-Resident (NRI): Stay <182 days → Only income received or accrued in India taxable
    3. Resident but Not Ordinarily Resident (RNOR): Special rules for foreign income

    Why it matters: Only income taxable in India should be reported.

    ✔ Step 2: Identify Current Income in India

    Common types of NRI income in India:

    • Salary from Indian employer
    • Fees for professional services rendered in India
    • Rental income from property
    • Interest from Indian bank accounts and deposits
    • Business or trading profits from Indian operations

    ✔ Step 3: Understand Taxability

    • NRI income received/accrued in India is taxable at normal slab rates or special rates
    • Salaries are taxed under Section 192
    • Fees for professional services are taxable as “Income from Business/Profession”

    Note: Foreign income of NRI is not taxable in India, unless they become a resident.

    ✔ Step 4: TDS Under Section 195

    When NRIs earn payments from Indian sources, TDS under Section 195 applies:

    • Deductor (payer) must withhold tax at applicable rates
    • TDS applies to:
      • Salary, professional fees, rent, interest, royalties
    • NRIs can apply for Lower/No TDS Certificate under Section 197 if tax liability is less than TDS

    Compliance tip: Ensure PAN and proper TDS deduction to avoid future disputes.

    ✔ Step 5: Double Taxation Avoidance Agreement (DTAA)

    • India has DTAA with multiple countries to avoid taxing same income twice
    • NRIs can claim foreign tax credit on tax paid abroad for income also taxable in India
    • Forms required: Form 67 for claiming FTC

    Example: Salary earned in India is taxable in India, but foreign income taxed abroad can claim credit.

    ✔ Step 6: Filing Income Tax Return

    • NRIs must file ITR-2 if no business income, or ITR-3 if business income exists
    • Report:
      • Salary, rent, professional fees, capital gains
      • TDS deducted (Form 26AS)
      • Foreign tax credits if DTAA applicable
    • File before due date to avoid penalty

    ✔ Step 7: Maintain Proper Documentation

    • PAN card and passport
    • Salary slips, rent receipts, bank statements
    • TDS certificates and Form 16/16A
    • DTAA documents and foreign tax paid proofs

    These records help in audit or dispute resolution.

    ✔ Step 8: Penalties for Non-Compliance

    • Non-filing or late filing attracts penalties under Sections 234A/B/C
    • Non-deduction of TDS under Section 195 may lead to interest and penalties
    • Proper filing and compliance ensures smooth financial operations in India

    FAQs – Current Income in India for NRI

    Q1: Are NRIs taxed on income earned outside India?
    A: No, only income received or accrued in India is taxable. Foreign income is exempt unless the NRI becomes a resident.

    Q2: What is Section 195 TDS for NRIs?
    A: Any payment made to NRIs from Indian sources (salary, rent, fees, interest) requires tax deduction at source under Section 195.

    Q3: Can an NRI claim DTAA benefits?
    A: Yes. NRIs can claim foreign tax credit under DTAA to avoid double taxation.

    Q4: Which ITR form should NRIs file for current income?
    A: ITR-2 for income from salary, property, or capital gains; ITR-3 if business/professional income is included.

    Q5: Can an NRI reduce TDS on professional fees in India?
    A: Yes, by applying for a Lower/No TDS Certificate under Section 197 with the Income Tax Department.

    Conclusion

    NRIs earning current income in India must carefully manage taxation, TDS, DTAA benefits, and IT filing. By following this step-by-step guide, NRIs can ensure legal compliance, optimize taxes, and avoid penalties.

    Disclaimer

    This blog is for informational purposes only and does not constitute tax or legal advice. Tax rules, TDS provisions, and DTAA agreements may change. NRIs should consult qualified tax professionals before filing income in India.

  • Step-by-Step Guide to NGO Project Report in India

    Introduction to NGO Project Report

    An NGO Project Report (also called Project Proposal or DPR) is a structured document that explains what problem the NGO will address, how it will be implemented, the budget required, timelines, and expected impact. A well-prepared project report is essential to secure CSR funding, government grants, institutional donations, and international aid.

    This Saving Mantra guide explains the step-by-step process for preparing an NGO Project Report in India, aligned with donor expectations, CSR norms, and compliance requirements.

    Why an NGO Project Report Is Important

    • Mandatory for CSR funding and grants
    • Demonstrates credibility and governance
    • Clarifies project scope, cost, and impact
    • Enables monitoring, audit, and reporting
    • Improves approval chances with corporates and donors

    Who Requires an NGO Project Report?

    An NGO project report is required by:

    • NGOs applying for CSR funding
    • NGOs seeking government or PSU grants
    • NGOs approaching private or institutional donors
    • NGOs submitting proposals to international agencies

    Step-by-Step Process to Prepare NGO Project Report in India

    Step 1: Identify the Social Problem

    Clearly define:

    • The issue to be addressed (education, health, skill development, environment, etc.)
    • Target beneficiaries and geographic area
    • Current gaps and need assessment

    Data-backed problem statements increase credibility.

    Step 2: Align with Legal & CSR Framework

    Ensure alignment with:

    • Schedule VII of the Companies Act, 2013
    • NGO objectives as per Trust Deed / MOA
    • CSR guidelines of funding companies

    Misalignment can lead to rejection.

    Step 3: Define Project Objectives & Outcomes

    Mention:

    • Primary and secondary objectives
    • Short-term and long-term outcomes
    • Measurable indicators (KPIs)

    Objectives should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound).

    Step 4: Describe Project Activities & Methodology

    Detail:

    • Activity-wise implementation plan
    • Delivery model and methodology
    • Role of NGO team and partners
    • Community engagement approach

    This shows execution capability.

    Step 5: Identify Target Beneficiaries

    Include:

    • Number of beneficiaries
    • Age group, gender, and socio-economic profile
    • Selection criteria

    Beneficiary clarity is critical for CSR and audit purposes.

    Step 6: Prepare Project Budget

    Create a detailed budget covering:

    • Program expenses
    • Administrative costs
    • Capital expenditure (if any)
    • Monitoring and evaluation costs

    Budgets must be reasonable, transparent, and justifiable.

    Step 7: Define Project Timeline

    Provide:

    • Start and end date
    • Activity-wise milestones
    • Review and reporting schedule

    Timelines help donors track progress.

    Step 8: Monitoring, Evaluation & Impact

    Explain:

    • Monitoring mechanisms
    • Reporting frequency
    • Impact measurement approach
    • Data collection methods

    This is essential for CSR audit and impact assessment.

    Step 9: NGO Profile & Compliance Section

    Include:

    • NGO background and experience
    • Registration details
    • 12AB, 80G, CSR-1 status (if applicable)
    • Past project experience and achievements

    Compliance readiness boosts trust.

    Step 10: Risk Management & Sustainability

    Mention:

    • Potential project risks
    • Mitigation strategies
    • Sustainability and exit plan

    This reflects long-term thinking.

    Standard NGO Project Report Format

    A typical NGO project report includes:

    1. Executive Summary
    2. About the NGO
    3. Problem Statement
    4. Project Objectives
    5. Project Activities & Methodology
    6. Target Beneficiaries
    7. Budget & Cost Break-up
    8. Project Timeline
    9. Monitoring & Impact Assessment
    10. Risk & Sustainability Plan

    Common Mistakes to Avoid

    • Generic or copied content
    • Unrealistic budgets
    • No impact measurement plan
    • Weak alignment with CSR norms
    • Missing compliance details

    How Saving Mantra Helps

    Saving Mantra provides end-to-end NGO Project Report services, including:

    • Project concept structuring
    • CSR-aligned proposal drafting
    • Budgeting and financial modeling
    • Impact framework design
    • Donor-ready documentation
    • Compliance integration (CSR, Income Tax)

    Disclaimer

    This article is for informational purposes only and does not constitute legal, financial, or professional advice. Project requirements and funding criteria vary by donor and authority. Readers are advised to consult qualified professionals before submission. Saving Mantra shall not be responsible for decisions taken based on this information.

  • NRI Guide: How to Create a Will in India

    Saving Mantra Blog: How to Create a Will for NRI in India

    Creating a will is essential for NRIs to ensure smooth transfer of assets in India to heirs and avoid disputes. A valid will clearly defines who inherits what, minimizes legal complications, and ensures your wishes are honored.

    This guide provides a step-by-step process for NRIs to create a legally valid will in India, covering drafting, registration, and key legal considerations.

    ✔ Step 1: Understand the Importance of a Will

    A will ensures:

    • Clear allocation of assets to heirs
    • Avoids disputes and litigation among family members
    • Reduces probate and succession complications
    • Ensures compliance with Indian succession laws

    Without a will, assets are distributed according to personal law or intestate succession, which may not reflect your wishes.

    ✔ Step 2: Identify Your Assets in India

    List all assets in India:

    • Immovable property: House, apartment, land, commercial property
    • Movable property: Bank accounts, shares, mutual funds, jewelry, vehicles
    • Insurance policies, retirement funds, and investments

    Documenting all assets ensures nothing is omitted in the will.

    ✔ Step 3: Choose Your Beneficiaries

    • Decide who inherits each asset
    • Specify shares if multiple heirs exist
    • Include alternate beneficiaries if primary heirs are unavailable
    • Consider NRIs can leave assets to residents or other NRIs

    ✔ Step 4: Appoint an Executor

    An executor ensures the will is executed as per your wishes:

    • Can be a trusted family member, friend, or legal professional
    • Responsible for:
      • Settling debts
      • Distributing assets
      • Filing probate if required

    ✔ Step 5: Draft the Will

    Key points for drafting:

    • Clearly mention your full name, address, and NRI status
    • Specify details of each asset and beneficiary
    • Include instructions for distribution, guardianship, and debts
    • Avoid ambiguous language to prevent disputes

    NRIs can either draft the will themselves or hire a lawyer in India specializing in succession law.

    ✔ Step 6: Sign the Will Properly

    • Sign the will in the presence of at least two witnesses
    • Witnesses must sign and provide details
    • Witnesses cannot be beneficiaries
    • Keep the will in writing (typed or handwritten) for validity

    ✔ Step 7: Registration of the Will (Optional but Recommended)

    • Register with Sub-Registrar Office in India
    • Registration ensures legal recognition and prevents tampering
    • Submit:
      • Original will
      • ID proofs of testator and witnesses
      • Registration fees

    Note: Registration is optional; a handwritten and signed will is valid if executed properly.

    ✔ Step 8: Store the Will Safely

    • Keep in a safe place known to executor and close family
    • Consider digital copies for reference
    • Avoid keeping the will in a locker or bank vault without accessibility

    ✔ Step 9: Review and Update Regularly

    • Update the will if:
      • New assets are acquired
      • Family circumstances change
      • Laws or regulations change

    Regular review ensures the will reflects current wishes and legal compliance.

    ✔ Step 10: Ensure Compliance with Indian Laws

    • Will should comply with:
      • Indian Succession Act 1925 for non-Muslims
      • Personal laws for Hindus, Muslims, Christians, etc.
    • NRIs with dual jurisdiction should also consider home country laws

    Conclusion

    Creating a will is a crucial step for NRIs to safeguard assets in India and ensure smooth inheritance. Following this step-by-step guide—drafting, execution, registration, and periodic updates—ensures your estate is distributed as per your wishes with minimal legal complications.

    Disclaimer

    This blog is for informational purposes only and does not constitute legal advice. Laws and procedures for wills in India may change. NRIs should consult a qualified lawyer before creating a will.

  • NRI Guide: Income from Inherited Property in India

    Saving Mantra Blog: Step-by-Step Process for Income Earned from Inherited Property for NRI in India

    NRIs inheriting property in India often earn income from rent or sale proceeds. Income from inherited property is taxable in India, and proper planning ensures compliance with Income Tax, FEMA regulations, and TDS rules.

    This Saving Mantra guide explains the step-by-step process for NRIs to manage, report, and repatriate income from inherited property in India.

    ✔ Step 1: Confirm Legal Ownership

    Before earning income, NRIs must ensure the property is legally transferred:

    • With a Will: Obtain probate from the civil court
    • Without a Will: Apply for Succession Certificate or Legal Heir Certificate
    • Update property records and title deed in the heir’s name

    ✔ Step 2: Identify the Type of Income

    Income from inherited property can be:

    1. Rental Income: Rent received from tenants
    2. Capital Gains: Profit from selling inherited property
    3. Other Income: Leasing commercial property, if allowed

    ✔ Step 3: Open NRE/NRO Bank Accounts

    • NRO Account: Mandatory for receiving rental income or property sale proceeds
    • NRE Account: Can be used for repatriation of income abroad
    • All transactions should go through bank accounts for FEMA compliance

    ✔ Step 4: Compute Rental Income

    • Gross Rental Income = Total rent received in FY
    • Deduct allowable expenses:
      • Municipal taxes
      • Standard deduction of 30% (Section 24(a))
      • Home loan interest (if applicable)
    • Net taxable rental income is added to the NRI’s Indian income

    ✔ Step 5: Compute Capital Gains on Sale

    • Long-Term Capital Gains (LTCG): Property held > 24 months, taxed at 20% with indexation
    • Short-Term Capital Gains (STCG): Property held ≤ 24 months, taxed at slab rates
    • Use cost of acquisition by previous owner + indexation to calculate LTCG

    ✔ Step 6: TDS Compliance

    • Rental income: Tenant deducts TDS at 30% for NRI landlords
    • Property sale: Buyer deducts TDS at 20% for LTCG / 30% for STCG
    • NRIs can apply for a lower TDS certificate under Section 197 if applicable

    ✔ Step 7: File Income Tax Return (ITR) in India

    • Use ITR-2 for income from inherited property
    • Report:
      • Rental income
      • Capital gains
      • TDS deducted by tenant/buyer
    • Claim TDS credit in the return to adjust tax liability

    ✔ Step 8: Repatriation of Funds

    • Rental income or property sale proceeds can be repatriated via NRO/NRE accounts
    • FEMA limits: Up to USD 1 million per financial year
    • Required documents:
      • PAN card
      • Tax payment proof
      • Probate/Succession certificate

    ✔ Step 9: Maintain Proper Records

    • Keep records for at least 6 years:
      • Rental agreements
      • Bank statements showing income
      • TDS certificates (Form 16A/26AS)
      • Legal ownership documents
      • Property sale and tax computation papers

    ✔ Step 10: Plan for Tax Optimization

    • Claim allowable deductions under Sections 24, 80C, 80D, etc.
    • Consider investing sale proceeds in specified assets to save LTCG tax
    • Use proper rental agreements to maximize net taxable income

    Conclusion

    Income from inherited property for NRIs in India is taxable and subject to TDS, FEMA, and ITR filing requirements. Following this step-by-step guide ensures NRIs can efficiently manage rental income, comply with Indian tax laws, and repatriate funds legally.

    Disclaimer

    This blog is for informational purposes only and does not constitute legal, tax, or investment advice. Income tax, FEMA, and property laws may change. NRIs should consult qualified professionals before earning or repatriating income from inherited property.

  • Step-by-Step Guide to NGO Accounting in India

    Introduction to NGO Accounting in India

    Proper NGO Accounting is the backbone of transparency, compliance, and donor confidence. In India, NGOs—including Trusts, Societies, and Section 8 Companies—must maintain accurate books of accounts and comply with provisions of the Income Tax Act, 1961, audit rules, and reporting requirements.

    This Saving Mantra guide explains the step-by-step process for NGO accounting in India, from day-to-day bookkeeping to audit readiness and compliance risk management.

    What Is NGO Accounting?

    NGO accounting is the systematic recording, classification, and reporting of:

    • Donations and grants
    • Program and project expenses
    • Administrative and compliance costs
    • Assets, liabilities, and funds
    • Restricted and unrestricted funds

    Unlike commercial accounting, NGO accounting focuses on application of income rather than profit.

    Why Proper NGO Accounting Is Critical

    • Mandatory for income tax exemption
    • Required for audit and assessments
    • Builds donor and CSR credibility
    • Supports 12AB, 80G, CSR, and FCRA compliance
    • Prevents penalties and cancellation risks

    Step-by-Step Process for NGO Accounting in India

    Step 1: Identify NGO Legal Structure

    Accounting treatment depends on whether the NGO is a:

    • Charitable Trust
    • Registered Society
    • Section 8 Company

    Each structure has specific reporting and compliance nuances.

    Step 2: Set Up Accounting System

    • Choose appropriate accounting software or manual system
    • Define chart of accounts (income, expenses, assets, liabilities)
    • Decide accounting method (cash or accrual)

    A structured setup ensures long-term compliance.

    Step 3: Maintain Proper Books of Accounts

    Daily bookkeeping should include:

    • Cash book
    • Bank book
    • General ledger
    • Donation and grant registers
    • Expense vouchers and bills

    All entries must be supported with documentation.

    Step 4: Segregate Funds Properly

    NGOs must clearly separate:

    • Restricted funds (project-specific grants)
    • Unrestricted funds (general donations)
    • Corpus funds (if any)

    Improper fund mixing is a common compliance risk.

    Step 5: Record Income Correctly

    Income sources may include:

    • Voluntary donations
    • CSR contributions
    • Government or private grants
    • Membership fees
    • Interest and other income

    Donations must be recorded donor-wise and purpose-wise.

    Step 6: Track Program & Administrative Expenses

    Expenses should be classified into:

    • Program/project expenses
    • Administrative expenses
    • Capital expenditure

    Project-wise accounting is essential for donor and CSR reporting.

    Step 7: Bank Reconciliation & Controls

    • Reconcile bank statements monthly
    • Monitor authorized signatories
    • Maintain internal controls and approvals

    Strong controls reduce fraud and audit issues.

    Step 8: Prepare Financial Statements

    At year-end, prepare:

    • Receipts & Payments Account
    • Income & Expenditure Account
    • Balance Sheet

    These statements form the basis for audit and tax filings.

    Step 9: Audit & Compliance Readiness

    Most NGOs require audit when income exceeds prescribed limits. Accounting must support:

    • Statutory audit
    • Income tax audit (if applicable)
    • CSR or donor audits

    Clean books simplify audit and reduce scrutiny.

    Step 10: Income Tax & Reporting Linkages

    Accounting data is used for:

    • Income tax return filing
    • Form 10BD / 10BE reporting
    • Compliance with conditions under Sections 11–13

    Accurate accounting preserves tax exemption benefits.

    Common NGO Accounting Mistakes

    • Poor documentation of donations
    • Mixing personal and NGO funds
    • No project-wise accounting
    • Delayed bookkeeping
    • Ignoring internal controls

    These can lead to audit qualifications or penalties.

    Best Practices for NGO Accounting

    • Maintain real-time books of accounts
    • Use project-wise cost centers
    • Conduct periodic internal reviews
    • Preserve records for minimum statutory period
    • Align accounting with compliance calendars

    How Saving Mantra Helps NGOs

    Saving Mantra provides end-to-end NGO accounting services, including:

    • Accounting system setup
    • Day-to-day bookkeeping
    • Project-wise fund accounting
    • Audit preparation and support
    • Income tax and compliance integration
    • Ongoing financial advisory

    Disclaimer

    This article is for informational purposes only and does not constitute legal, accounting, or professional advice. Accounting and compliance requirements may vary based on NGO structure and applicable laws. Readers are advised to consult qualified professionals before implementation. Saving Mantra shall not be responsible for actions taken based on this information.

  • NRI Guide: Inheritance of Property & Assets in India

    Saving Mantra Blog: Step-by-Step Process for Inheritance of Assets or Property Held in India for NRI

    Inheritance of property or assets in India by NRIs involves legal procedures under Indian succession laws, documentation, and tax compliance. Proper understanding is essential to ensure smooth transfer and avoid disputes.

    This guide explains the step-by-step process for NRIs to inherit assets or property in India, including legal requirements, documentation, and tax considerations.

    ✔ Step 1: Determine Type of Inheritance

    Assets may include:

    • Immovable property – Land, house, apartment, commercial property
    • Movable property – Bank accounts, fixed deposits, securities, shares, jewelry

    Legal procedures vary depending on whether the deceased left a will or not.

    ✔ Step 2: Check for a Valid Will

    • If a will exists:
      • Executor named in will manages asset transfer
      • Probate may be required if property is significant or in a high-value estate
    • If no will (Intestate succession):
      • Assets distributed according to Indian Succession Act or personal law
      • Legal heirs may apply for a Succession Certificate or Letter of Administration

    ✔ Step 3: Apply for Probate or Succession Certificate

    For Probate (Will exists):

    • File petition in the competent civil court
    • Submit:
      • Original will
      • Death certificate
      • Identity and address proof of heirs
    • Court issues probate confirming legal ownership

    For Succession Certificate (No Will):

    • File petition in District Civil Court
    • Submit:
      • Death certificate
      • Legal heir declaration
      • Relationship proof
    • Court issues Succession Certificate for movable property

    ✔ Step 4: Collect Required Documents

    Common documents for NRIs:

    • Death certificate of deceased
    • Legal heir certificate or succession/probate certificate
    • Passport, OCI/PIO card, PAN card of NRI heir
    • Property ownership documents or bank statements
    • NRI proof and address abroad
    • Affidavits declaring relationship with deceased

    ✔ Step 5: Transfer of Immovable Property

    • File property transfer deed with sub-registrar office
    • Pay stamp duty and registration charges
    • Submit probate or succession certificate along with:
      • Original title deed
      • Encumbrance certificate
      • NRI ID proof
    • Property title transferred in heir’s name

    ✔ Step 6: Transfer of Movable Assets

    • Bank accounts, FDs, securities:
      • Approach bank or depository
      • Submit probate/succession certificate
      • Provide NRI ID proof and PAN
    • Shares/Mutual funds:
      • Update nominee details or apply for transfer using Demat account

    ✔ Step 7: Tax Implications

    • Inheritance of property: Not taxable in India for NRIs
    • Capital gains tax: Applicable on sale of inherited property
    • TDS: Required for property sale by buyer
    • Income from inherited assets: Taxable in India (rental income, interest)
    • NRIs should maintain records for Income Tax returns

    ✔ Step 8: Repatriation of Funds (If Needed)

    • NRIs can repatriate proceeds from inherited movable assets
    • Comply with FEMA rules via Authorized Dealer banks
    • Up to USD 1 million per financial year can be repatriated for inherited property sale

    ✔ Step 9: Legal and Estate Planning Advice

    • Consult a lawyer specializing in Indian succession laws
    • Consider updating Wills in India and abroad to avoid complications
    • Ensure compliance with RBI/FEMA for fund transfers

    Conclusion

    Inheritance of property and assets in India for NRIs requires a clear understanding of succession laws, probate/succession certificate procedures, taxation, and FEMA compliance. Following this step-by-step guide ensures a smooth transfer and legal protection.

    Disclaimer

    This blog is for informational purposes only and does not constitute legal or tax advice. Indian inheritance laws, taxation, and FEMA rules may change. NRIs should consult qualified professionals before claiming inheritance in India.

  • Step-by-Step Guide to NGO Income Tax Advisory in India

    Introduction to NGO Income Tax Advisory

    Effective Income Tax Advisory is essential for NGOs to lawfully claim exemptions, maintain transparency, and mitigate compliance risks. Advisory covers registration, audits, return filing, reporting, and risk management under the Income Tax Act, 1961.

    This Saving Mantra guide explains the step-by-step NGO Income Tax Advisory process in India, designed for charitable trusts, societies, and Section 8 companies.

    Scope of NGO Income Tax Advisory

    NGO tax advisory typically includes:

    • 12AB & 80G compliance and renewals
    • Annual income tax return (ITR) filing
    • Tax audit and reporting
    • Donation reporting (10BD/10BE)
    • Notices, assessments, and replies
    • Risk identification and mitigation

    Step-by-Step Process for NGO Income Tax Advisory

    Step 1: Applicability & Compliance Assessment

    Advisors evaluate:

    • Legal status (Trust/Society/Section 8)
    • Existing registrations (12AB, 80G, CSR-1)
    • Sources of income (donations, grants, interest)
    • Past compliance gaps

    This sets the advisory roadmap.

    Step 2: Registration & Exemption Advisory

    Ensure valid registrations:

    • 12AB for income tax exemption
    • 80G for donor deductions
    • Review objects to ensure charitable purpose

    Timely renewals avoid loss of exemptions.

    Step 3: Accounting & Record Management

    Advisory includes:

    • Proper books of accounts
    • Segregation of restricted vs unrestricted funds
    • Project-wise accounting
    • Compliance with utilization norms

    Clean accounting reduces audit and scrutiny risks.

    Step 4: Income Tax Audit (If Applicable)

    Tax audit is required when:

    • Income exceeds prescribed limits
    • Conditions under Sections 11–13 apply

    Audit support includes:

    • Audit readiness review
    • Documentation and schedules
    • Coordination with auditors

    Step 5: Income Tax Return Filing

    NGOs must:

    • File appropriate ITR form on time
    • Disclose income, application, and accumulation
    • Attach audit report (where applicable)

    Accurate filing preserves exemption benefits.

    Step 6: Donation & Compliance Reporting

    Mandatory reports include:

    • Form 10BD (statement of donations)
    • Form 10BE (donor certificate)

    Advisory ensures correct donor data and timelines.

    Step 7: Handling Notices & Assessments

    NGOs may receive notices from the Income Tax Department for:

    • Clarifications
    • Defect memos
    • Assessments or scrutiny

    Advisory covers drafting replies, document collation, and representation.

    Step 8: Tax Risk Management & Advisory

    Risk management focuses on:

    • Avoiding violations under Sections 11–13
    • Monitoring prohibited activities
    • Ensuring arm’s length transactions
    • Governance and internal controls

    Proactive advisory prevents penalties and cancellations.

    Common NGO Income Tax Risks

    • Lapse of 12AB or 80G validity
    • Improper utilization of funds
    • Incomplete audit documentation
    • Delayed filings and reports
    • Non-response to notices

    Early identification minimizes exposure.

    Best Practices for NGO Tax Compliance

    • Maintain real-time books of accounts
    • File returns and reports before deadlines
    • Keep registrations active and updated
    • Document board approvals and resolutions
    • Conduct periodic compliance reviews

    How Saving Mantra Delivers NGO Tax Advisory

    Saving Mantra provides end-to-end NGO Income Tax Advisory, including:

    • Compliance health check & roadmap
    • 12AB & 80G registration/renewal
    • Tax audit coordination
    • ITR filing & reporting
    • Notice handling and representation
    • Ongoing tax risk management

    Disclaimer

    This article is for informational purposes only and does not constitute legal, tax, or professional advice. Provisions of the Income Tax Act and related rules are subject to change. Readers are advised to consult qualified professionals before taking action. Saving Mantra shall not be responsible for decisions taken based on this content.

  • Filing Tax Returns with Foreign Income in India

    Saving Mantra Blog: Step-by-Step Process for Residents with Foreign Income Tax Returns Filing in India

    Indian residents earning income abroad are required to disclose and pay taxes on global income in India. Filing Income Tax Returns (ITR) for foreign income involves understanding foreign income types, TDS, exemptions, and double taxation avoidance treaties (DTAA).

    This guide provides a step-by-step process for residents to file tax returns in India with foreign income, ensuring full compliance with the Income Tax Act.

    ✔ Step 1: Identify Residential Status

    Determine if you are a resident, non-resident, or resident but not ordinarily resident (RNOR):

    • Resident: Stay ≥182 days in India in a financial year or satisfy other conditions
    • NRI: Stay <182 days in India
    • RNOR: Resident but not ordinarily resident under Indian law

    Taxability:

    • Residents are taxed on global income
    • NRIs are taxed on income received or accrued in India

    ✔ Step 2: Classify Foreign Income

    Foreign income can include:

    • Salary from overseas employment
    • Interest, dividends, or capital gains
    • Rental income from foreign property
    • Pensions or social security benefits

    ✔ Step 3: Gather Required Documents

    • Passport and visa (proof of stay abroad)
    • Foreign salary slips or employment contract
    • Bank statements showing foreign income
    • Tax deduction certificates (if foreign tax paid)
    • Proof of foreign tax payment for DTAA claim
    • PAN card and Aadhaar
    • Foreign property documents (if applicable)

    ✔ Step 4: Determine Taxable Amount

    • Convert foreign income to INR at RBI-approved exchange rates
    • Claim deductions under:
      • Section 80C, 80D, 80G etc.
      • Foreign tax credit under Section 91 if double taxation applies
    • Compute tax as per Indian income tax slab rates

    ✔ Step 5: Select Correct ITR Form

    • ITR-2: For residents with foreign income and no business income
    • ITR-3: For residents with foreign income + business/profession
    • ITR-4: Only for business income under presumptive taxation

    Choose the form applicable to your source of income and deductions.

    ✔ Step 6: Report Foreign Assets and Income

    • Disclose foreign bank accounts, property, and financial assets in Schedule FA
    • Include:
      • Account numbers and country
      • Maximum balance during FY
      • Income from foreign assets

    Non-disclosure can attract penalties under Indian law.

    ✔ Step 7: Claim Double Taxation Avoidance (DTAA)

    • Residents can claim foreign tax credit (FTC) for taxes paid abroad
    • Use Form 67 to report FTC before filing return
    • Ensure certificate from foreign tax authority (if applicable)

    ✔ Step 8: Compute Tax Liability

    • Combine Indian income + foreign income
    • Subtract foreign tax credit
    • Apply surcharge, cess, and rebates if eligible
    • Pay any self-assessment tax before filing ITR

    ✔ Step 9: File Income Tax Return Online

    • Visit https://www.incometax.gov.in
    • Fill the applicable ITR form
    • Upload supporting documents if required
    • Verify using Aadhaar OTP, net banking, or DSC
    • Keep acknowledgment (ITR-V) safely

    ✔ Step 10: Maintain Records

    Keep records for at least 6 years:

    • Foreign salary slips and bank statements
    • Tax payment receipts abroad
    • Exchange rate conversions
    • Property or investment documents

    These are essential for IT audits or queries.

    Conclusion

    Filing Income Tax Returns in India with foreign income requires careful reporting, tax computation, and claiming applicable DTAA benefits. By following this step-by-step process, Indian residents can ensure compliance, avoid penalties, and optimize tax liability.

    Disclaimer

    This blog is for informational purposes only and does not constitute legal or tax advice. Tax laws, DTAA provisions, and reporting rules may change. Consult a qualified tax professional before filing returns with foreign income.

  • Step-by-Step Guide to CSR Consultancy in India

    Introduction to CSR Consultancy in India

    Corporate Social Responsibility (CSR) in India is governed by Section 135 of the Companies Act, 2013, making it mandatory for eligible companies to spend a portion of their profits on social development activities.

    CSR consultancy plays a crucial role in ensuring legal compliance, effective project implementation, transparent reporting, and measurable social impact for both companies and NGOs.

    This Saving Mantra guide explains the step-by-step CSR consultancy process in India, including Section 135 compliance, CSR project lifecycle (planning–execution–reporting), CSR audit, and impact assessment.

    What Is CSR Consultancy?

    CSR consultancy is a professional service that helps:

    • Companies comply with CSR legal requirements
    • NGOs become CSR-ready and eligible for funding
    • Design, execute, and monitor CSR projects
    • Ensure proper reporting, audit, and impact measurement

    It bridges the gap between corporates, NGOs, and regulatory authorities.

    Applicability of CSR under Section 135

    CSR provisions apply to companies having:

    • Net worth of ₹500 crore or more, or
    • Turnover of ₹1,000 crore or more, or
    • Net profit of ₹5 crore or more

    Such companies must spend at least 2% of average net profits on CSR activities listed under Schedule VII.

    Key CSR Compliance Requirements

    • Formation of CSR Committee (where applicable)
    • CSR Policy drafting and approval
    • CSR-1 registration of implementing NGOs
    • Annual CSR reporting to the Ministry of Corporate Affairs (MCA)
    • Impact assessment for large CSR projects

    Step-by-Step CSR Consultancy Process in India

    Step 1: CSR Applicability & Compliance Assessment

    CSR consultants evaluate:

    • Applicability under Section 135
    • CSR spending obligations
    • Existing compliance gaps
    • NGO eligibility and readiness

    This forms the compliance foundation.

    Step 2: CSR Strategy & Planning

    Planning includes:

    • Identification of CSR focus areas (Schedule VII)
    • Alignment with company vision and ESG goals
    • Budget allocation and timelines
    • Partner NGO shortlisting and due diligence

    Step 3: CSR Project Design

    CSR project planning involves:

    • Defining project objectives and outcomes
    • Beneficiary identification
    • Activity-wise budgeting
    • Risk assessment and mitigation
    • KPI and impact indicators

    Well-designed projects ensure long-term impact.

    Step 4: CSR Project Execution

    Execution support includes:

    • Fund deployment monitoring
    • NGO coordination and governance
    • On-ground implementation review
    • Compliance with utilization norms

    Consultants ensure transparency and efficiency.

    Step 5: CSR Reporting & Documentation

    Mandatory reporting includes:

    • Board Report disclosures
    • Annual CSR report formats
    • Utilization certificates
    • NGO performance reports

    Accurate reporting avoids penalties and scrutiny.

    Step 6: CSR Audit & Compliance Review

    CSR audit ensures:

    • Proper utilization of CSR funds
    • Compliance with Section 135 & CSR Rules
    • Financial accuracy and documentation
    • Governance and internal control review

    Audit readiness is critical for corporates.

    Step 7: CSR Impact Assessment

    Impact assessment is mandatory when:

    • CSR obligation ≥ ₹10 crore
    • Individual project value ≥ ₹1 crore
    • Project duration ≥ 1 year

    Assessment includes:

    • Social and environmental impact analysis
    • Outcome measurement against KPIs
    • Independent assessment reports

    CSR Consultancy for NGOs

    CSR consultants help NGOs with:

    • CSR-1 registration
    • 12AB and 80G compliance
    • Project proposal and budgeting
    • Impact reporting and documentation
    • Corporate engagement readiness

    CSR Consultancy for Companies

    For companies, CSR consultancy covers:

    • Section 135 compliance
    • CSR policy drafting
    • NGO due diligence
    • Project monitoring and reporting
    • Audit and impact assessment support

    Common CSR Compliance Challenges

    • Improper NGO selection
    • Weak project documentation
    • Delayed or inaccurate reporting
    • Non-compliance with Schedule VII
    • Inadequate impact measurement

    Professional consultancy minimizes these risks.

    How Saving Mantra Delivers CSR Consultancy

    Saving Mantra provides end-to-end CSR consultancy services, including:

    • Section 135 applicability & compliance
    • CSR strategy and project planning
    • NGO onboarding & due diligence
    • CSR execution monitoring
    • CSR audit and impact assessment
    • MCA reporting and documentation

    Disclaimer

    This article is for informational purposes only and does not constitute legal, tax, or professional advice. CSR provisions under the Companies Act and related rules are subject to change. Readers are advised to consult qualified professionals before implementing CSR strategies or projects. Saving Mantra shall not be responsible for decisions taken based on this content.

  • Lower TDS Certificate for NRI Property Sale: Guide

    Saving Mantra Blog: Step-by-Step Process for Lower Tax Deduction Certificate for NRI on Sale of Property in India

    When NRIs sell property in India, the buyer is required to deduct TDS at 20% (plus surcharge and cess) on long-term capital gains or at 30% for short-term gains. However, NRIs can reduce this TDS liability by obtaining a Lower/No TDS Certificate from the Income Tax Department under Section 197 of the Income Tax Act.

    This guide explains the complete step-by-step process for NRIs to apply for a Lower Tax Deduction Certificate on property sale in India.

    ✔ Step 1: Determine Eligibility

    NRIs can apply for a Lower TDS Certificate if:

    • Total tax liability on capital gains is less than the TDS deducted at source
    • They want to avoid excess TDS deduction by the buyer
    • They have valid PAN and proof of NRI status

    ✔ Step 2: Calculate Expected Tax Liability

    Before applying, NRIs should:

    • Compute capital gains:
      • Long-term (holding period > 24 months)
      • Short-term (holding period ≤ 24 months)
    • Consider deductions under sections 54, 54EC, or 54F (if applicable)
    • Estimate total tax payable based on income slab and exemptions

    This helps in determining the reduced TDS amount to request.

    ✔ Step 3: Prepare Required Documents

    The following documents are typically required:

    • PAN card
    • Passport / OCI/PIO proof
    • Sale agreement or property deed
    • Computation of capital gains and expected tax liability
    • Bank account details in India
    • Form 13 (Application for Lower/No TDS Certificate)

    ✔ Step 4: Fill Form 13 Online (TRACES Portal)

    • Visit the Income Tax Department website or TRACES portal
    • Fill Form 13 (Application for Lower Deduction Certificate)
    • Enter details:
      • Name, PAN, address
      • Property details
      • Estimated capital gains and tax computation
      • Buyer’s details (TDS deductor)

    ✔ Step 5: Submit the Application

    • Attach all supporting documents
    • Upload computation of expected capital gains tax
    • Submit the application electronically on TRACES/Income Tax Portal

    Once submitted, an Acknowledgment Number is generated.

    ✔ Step 6: Income Tax Department Verification

    • The Income Tax Officer verifies:
      • PAN and identity
      • Computation of capital gains and proposed lower TDS
      • Compliance with Section 197
    • Officer may request additional documents if needed

    ✔ Step 7: Issuance of Lower/No TDS Certificate

    • On verification, the department issues a Lower/No TDS Certificate specifying:
      • PAN of NRI seller
      • Buyer details (TDS deductor)
      • Certificate validity and lower TDS rate
    • Certificate can be downloaded from the TRACES portal.

    ✔ Step 8: Provide Certificate to Buyer

    • Share the Lower TDS Certificate with the buyer or deductor
    • Buyer deducts TDS as per the certificate instead of the standard 20% or 30%
    • Ensure a copy is kept for future IT filing

    ✔ Step 9: File Income Tax Return

    • Even after obtaining lower TDS, NRIs must file IT return in India
    • Report full capital gains, exemptions, and TDS deducted
    • Any remaining tax payable must be paid; excess TDS can be claimed as refund

    ✔ Step 10: Maintain Records

    • Keep copies of:
      • Lower TDS Certificate
      • Property sale deed
      • PAN, passport, and proof of NRI status
      • Bank receipts and TDS challans

    These documents are important for IT compliance and future audits.

    Conclusion

    Obtaining a Lower Tax Deduction Certificate is essential for NRIs selling property in India to avoid excess TDS. Following the steps—eligibility check, computation, Form 13 submission, and certificate issuance—ensures efficient tax planning and compliance.

    Disclaimer

    This article is for informational purposes only and does not constitute legal or tax advice. Tax rules, rates, and procedures may change. NRIs should consult a qualified tax professional before applying for a Lower TDS Certificate.