Saving Mantra Blogs

Category: Business Compliances

  • 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.

  • NRI Health Insurance in India: Step-by-Step Guide

    Saving Mantra Blog: Step-by-Step Process for NRI to Assess Health Insurance Need and Buy in India

    For NRIs, health insurance in India is crucial to protect against rising medical costs and emergencies. Whether you visit India occasionally or maintain a base here, a comprehensive health insurance policy ensures financial security for you and your family.

    This Saving Mantra guide explains the step-by-step process for NRIs to assess their health insurance needs and buy a suitable policy in India, including coverage options, documentation, and claims procedure.

    ✔ Step 1: Evaluate Your Health Insurance Needs

    NRIs should assess:

    • Age and health condition
    • Family members to cover
    • Frequency of visits to India
    • Existing insurance coverage abroad
    • Hospitalization costs in India
    • Critical illness or maternity coverage requirements

    Use tools like health risk calculators or consult an insurance advisor to estimate ideal coverage.

    ✔ Step 2: Decide Coverage Type

    Common health insurance options for NRIs:

    1. Individual Health Insurance: Covers a single person.
    2. Family Floater Policy: Covers family members under a single sum insured.
    3. Top-up/ Super Top-up Policy: Adds extra coverage above an existing policy.
    4. Critical Illness Insurance: Covers severe diseases like cancer, heart attack.
    5. Senior Citizen Health Insurance: For NRIs aged 60+ visiting India.

    ✔ Step 3: Determine Sum Insured

    • Base it on age, medical history, city-specific hospital costs
    • Recommended sum: ₹10–50 lakhs depending on coverage needs
    • Include room rent limits, ICU charges, and outpatient expenses (if desired)

    ✔ Step 4: Check Policy Features

    Essential features for NRIs:

    • Cashless hospitalization network
    • Pre-existing disease coverage
    • Maternity and newborn benefits
    • Worldwide emergency cover (if applicable)
    • No claim bonus and cumulative bonus
    • Premium flexibility

    ✔ Step 5: Compare Policies

    • Use insurance aggregator websites or consult insurance advisors
    • Compare premium, coverage, exclusions, network hospitals, claim settlement ratio
    • Check insurer’s track record for quick claim settlements

    ✔ Step 6: Verify Eligibility for NRIs

    NRIs must satisfy:

    • Valid Indian PAN or proof of NRI status
    • Indian bank account for premium payments (NRE/NRO)
    • Address proof in India or abroad (as per insurer’s norms)
    • Minimum stay requirement for policy activation (usually 180 days in India for some insurers)

    ✔ Step 7: Complete Documentation

    Documents typically required:

    • Passport copy
    • Visa / OCI / PIO card
    • NRI proof and overseas address
    • Existing medical records (if any)
    • Nominee details
    • Bank account proof (for premium payment)

    ✔ Step 8: Pay Premium

    • Payment can be made online via Indian bank account
    • Some insurers allow international cards for premium payment
    • Keep payment receipts for future claims

    ✔ Step 9: Policy Issuance & Review

    • Review policy schedule, terms, and exclusions carefully
    • Confirm sum insured, waiting periods, co-pay, and deductibles
    • Activate policy from start date

    ✔ Step 10: Filing Claims

    • For cashless hospitalization, approach network hospitals
    • Submit documents: claim form, bills, discharge summary, ID proof
    • For reimbursement claims, submit bills and medical reports to insurer
    • Track claim status via insurer portal or customer service

    ✔ Step 11: Annual Review & Renewal

    • Check coverage adequacy annually
    • Renew before expiry to avoid break in coverage
    • Consider top-up policies for increased medical costs or aging

    Conclusion

    NRIs must proactively assess their health insurance needs in India to cover hospitalization, critical illness, and family healthcare. By carefully evaluating coverage, comparing policies, and ensuring documentation, NRIs can secure financial protection during medical emergencies.

    Disclaimer

    This blog is for informational purposes only and does not constitute financial or insurance advice. Insurance products, rules, and premiums may change. NRIs should consult licensed insurance professionals before purchasing a policy in India.

  • Step-by-Step Guide to NGO CSR-1 Filing in India

    Introduction to NGO CSR-1 Filing

    CSR-1 filing is a mandatory compliance for NGOs that wish to receive Corporate Social Responsibility (CSR) funds from companies. As per the Companies Act, 2013 and CSR Rules, only NGOs registered with the Ministry of Corporate Affairs (MCA) through Form CSR-1 are eligible to undertake CSR activities for corporates.

    This Saving Mantra guide explains the step-by-step process for NGO CSR-1 filing in India, including eligibility, documentation, timelines, and post-registration compliance.

    What Is CSR-1 Registration?

    CSR-1 registration:

    • Is a one-time registration with MCA
    • Allots a unique CSR Registration Number
    • Enables NGOs to receive CSR funds from eligible companies
    • Applies to trusts, societies, and Section 8 companies

    Without CSR-1 approval, corporates cannot legally donate CSR funds to an NGO.

    Who Is Required to File CSR-1?

    CSR-1 filing is mandatory for:

    • Charitable Trusts
    • Registered Societies
    • Section 8 Companies

    Eligibility conditions:

    • NGO must be registered under 12AB
    • NGO must have 80G registration
    • NGO must have minimum 3 years of track record (except government entities)

    Benefits of CSR-1 Filing

    • Mandatory eligibility for CSR funding
    • Official recognition by MCA
    • Increased trust among corporates
    • Transparent and compliant CSR operations
    • Easy onboarding with CSR partners

    Step-by-Step Process for NGO CSR-1 Filing in India

    Step 1: Confirm Eligibility

    Ensure the NGO has:

    • Valid 12AB registration
    • Valid 80G registration
    • At least 3 years of charitable activity
    • Proper governance and compliance history

    Step 2: Appoint Authorized Signatory

    • Board / Trustee resolution authorizing CSR-1 filing
    • Authorized signatory must have DSC
    • PAN of authorized person required

    Step 3: Prepare Required Documents

    Documents typically required:

    • NGO registration certificate
    • Trust deed / MOA & Bye-laws
    • 12AB certificate
    • 80G certificate
    • PAN of NGO
    • PAN & DSC of authorized signatory
    • Governing body details

    Step 4: File Form CSR-1 on MCA Portal

    • Login to MCA portal
    • Select Form CSR-1
    • Enter NGO and registration details
    • Upload required documents
    • Digitally sign using DSC

    Step 5: Verification by MCA

    • MCA verifies details and documents
    • Clarifications may be requested if discrepancies exist

    Step 6: Allotment of CSR Registration Number

    Once approved:

    • Unique CSR Registration Number is issued
    • NGO is listed as CSR-eligible
    • NGO can legally receive CSR funds

    Time Required for CSR-1 Approval

    • Typical processing time: 7–15 working days
    • May vary based on MCA scrutiny and accuracy of documents

    Post CSR-1 Filing Compliance

    After registration, NGOs must:

    • Use CSR funds strictly for approved projects
    • Maintain separate project-wise records
    • Provide utilization reports to corporates
    • Ensure alignment with Schedule VII activities
    • Continue 12AB and 80G compliance

    Common Reasons for CSR-1 Rejection

    • Inactive or invalid 12AB / 80G registration
    • Less than 3 years operational history
    • Incorrect or mismatched details
    • Improper authorization or DSC issues

    How Saving Mantra Helps NGOs

    Saving Mantra provides end-to-end CSR-1 filing services, including:

    • Eligibility assessment
    • Documentation and resolution drafting
    • MCA Form CSR-1 filing
    • Follow-ups and error resolution
    • CSR compliance and reporting support

    Disclaimer

    This article is for informational purposes only and does not constitute legal, tax, or professional advice. CSR laws and MCA procedures are subject to change. Readers are advised to consult qualified professionals before filing CSR-1. Saving Mantra shall not be responsible for decisions taken based on this information.

  • NRI Investment in Securities: Step-by-Step Guide

    Saving Mantra Blog: Step-by-Step Process for Investment in Securities for NRI in India

    Investing in Indian securities offers NRIs the opportunity to diversify portfolios, earn returns, and participate in India’s growing economy. NRIs can invest in equities, mutual funds, bonds, and derivatives subject to RBI/FEMA and SEBI guidelines.

    This Saving Mantra guide explains the complete step-by-step process for NRIs to invest in securities in India, including account setup, documentation, investment rules, repatriation, and compliance.

    ✔ Step 1: Understand the Investment Rules for NRIs

    NRIs can invest in Indian securities via two types of accounts:

    1. NRE Account (Non-Resident External)
      • Repatriable principal & interest
      • Fully convertible to foreign currency
    2. NRO Account (Non-Resident Ordinary)
      • Non-repatriable without RBI approval (up to USD 1 million)
      • Suitable for income earned in India

    Investment options available:

    • Equity shares (listed on NSE/BSE)
    • Mutual funds
    • Government and corporate bonds
    • Exchange Traded Funds (ETFs)
    • Derivatives (if SEBI registered)

    ✔ Step 2: Open Necessary Accounts

    NRIs must open:

    1. Bank Account (NRE/NRO) – For fund transfer
    2. Demat Account – To hold securities in electronic form
    3. Trading Account – Linked to Demat account for buying/selling securities

    Banks and brokers often provide 3-in-1 NRI accounts integrating Bank + Demat + Trading accounts.

    ✔ Step 3: Complete KYC (Know Your Customer)

    KYC documents required for NRIs include:

    • Passport (primary ID)
    • Overseas address proof
    • Indian address proof (if any)
    • PAN card (mandatory)
    • Photographs
    • NRI declaration / PIS (Portfolio Investment Scheme) registration

    Note: For investing in equities, NRIs must register under Portfolio Investment Scheme (PIS) with RBI through an AD Category-I bank.

    ✔ Step 4: Register Under Portfolio Investment Scheme (PIS)

    PIS allows NRIs to invest in Indian stock markets under RBI monitoring.

    Procedure:

    • Apply through AD Category-I bank
    • Provide PAN, passport, NRI status proof
    • Linked to NRE/NRO account
    • Bank forwards application to RBI for approval

    Once approved, NRI can invest in equities via trading account.

    ✔ Step 5: Fund Your Accounts

    • Transfer funds from overseas to NRE/NRO accounts
    • Maintain documentation for FEMA compliance
    • NRE account funds are fully repatriable, NRO subject to repatriation limits

    ✔ Step 6: Start Investing in Securities

    NRIs can now invest in:

    • Equities – Buy/sell listed shares on NSE/BSE
    • Mutual Funds – Invest in schemes allowed for NRIs
    • Bonds/Debentures – Corporate or government
    • ETFs & Derivatives – Eligible NRIs only

    Tips:

    • Monitor sector limits for FDI/FPI
    • Avoid prohibited trades
    • Check repatriation rules

    ✔ Step 7: Repatriation of Funds

    • NRIs can repatriate proceeds from NRE accounts freely
    • NRO account repatriation allowed up to USD 1 million per financial year with Form 15CA/15CB
    • Maintain bank records for RBI verification

    ✔ Step 8: Taxation and Compliance

    • Dividend income: Taxed at 20% (DTAA may apply)
    • Capital gains tax:
      • Short-term: 15% on listed shares
      • Long-term: 10–20% depending on holding
    • TDS applicable on dividends and gains
    • File Indian income tax return if taxable income exists
    • Maintain investment records for FEMA and RBI compliance

    ✔ Step 9: Reporting Requirements

    • RBI & AD Bank: For PIS transactions
    • SEBI Compliance: Broker reports transactions
    • Income Tax: TDS deducted and annual IT return

    Non-compliance may lead to penalties and restrictions on trading.

    Conclusion

    Investing in Indian securities is a lucrative opportunity for NRIs. By following the step-by-step process—account setup, PIS registration, investing via approved channels, and complying with FEMA and tax laws—NRIs can maximize returns safely while ensuring full compliance with Indian regulations.

    Disclaimer

    This blog is for informational purposes only. It does not constitute legal, tax, or investment advice. Regulations under RBI, SEBI, and FEMA may change. NRIs should consult professionals before investing in Indian securities.