Financial decisions rarely go wrong because people lack money — they go wrong because people lack the right information at the right time. This belief has shaped much of the outreach work carried out by Ashutosh Financial Services over the years, particularly for audiences whose financial lives span more than one country and, as a result, more than one set of rules.
On November 19, 2022, Ashutosh Financial Services hosted a webinar titled “NRI Financial Planning – Taxation & Regulation Aspects,” designed specifically for Non-Resident Indians navigating the complexities of managing money across borders. The session was led by Daxesh Kothari and CA CFP Rajit Kothari, both of whom brought a practitioner’s perspective to a subject that often overwhelms even financially literate individuals. For NRIs, the challenge is rarely a lack of income or assets. It is the layering of two tax systems, two sets of regulations, and often two currencies, all of which need to work together without triggering unnecessary tax outgo or compliance lapses.
The session opened with a foundational question that many NRIs quietly struggle with: if I earn income both in India and abroad, how exactly am I taxed? The speakers explained that taxation across countries generally follows one of two principles — the residence rule, where a country taxes a person’s global income simply because they live there, and the source rule, where a country taxes only the income generated within its borders. For NRIs, this distinction matters enormously. Depending on residential status, whether “resident and ordinarily resident,” “resident but not ordinarily resident,” or “non-resident,” the taxability of Indian income versus foreign income changes significantly. Indian income is always taxable, while foreign income is only taxed for those who qualify as ordinarily resident.
A significant portion of the discussion focused on the Double Taxation Avoidance Agreement, or DTAA, a mechanism India has established with over ninety countries to prevent the same income from being taxed twice. The speakers walked through how an NRI can choose whichever is more favourable, the DTAA or the domestic Income Tax Act, when calculating their tax liability. They also illustrated this with concrete numbers, showing how dividend and interest income is taxed differently depending on the country of residence. An NRI based in the UAE, for instance, faces a notably lower withholding rate on interest income than one based in the US or Canada, a distinction that can meaningfully affect investment planning.
The session also addressed a special tax regime under Chapter XII-A of the Income Tax Act, which applies to income from specified assets, such as shares of Indian companies, deposits with public limited companies, or government securities, purchased using convertible foreign exchange. Long-term capital gains on such assets can even be exempted from tax if the proceeds are reinvested in similar assets within six months and held for three years, a provision that rewards patient, structured investing over impulsive withdrawals.
Tax Deducted at Source, commonly referred to as TDS, was another area covered in depth. The speakers clarified that any payment to an NRI, barring salary, is subject to TDS under Section 195, and that this deduction generally applies to the entire sale consideration, not just the profit portion, in property transactions. This is a detail many NRIs overlook until they find a much larger amount withheld than expected. The webinar also touched on advance tax obligations, noting that most NRIs are required to pay tax in quarterly instalments if their liability crosses a modest threshold, and that capital gains must be accounted for in the very next instalment after they arise.
On the regulatory side, the session offered practical guidance on how NRIs should structure their banking relationships in India, distinguishing between NRO, NRE, FCNR, and RFC accounts, and explaining which account suits which purpose, from holding rupee income to parking foreign currency safely against exchange rate fluctuations. The speakers also outlined the rules around repatriating funds abroad, including the well-known one million dollar limit on NRO transfers, and clarified that current income such as rent or interest generally faces no such ceiling, provided applicable taxes have been settled. Restrictions around real estate, including the inability of NRIs to purchase agricultural land, were also addressed, along with the option to inherit such property even where direct purchase is not allowed.
The breadth of topics covered in this session reflects a simple reality: NRIs are often making financial decisions blind, relying on assumptions rather than current regulation. Sessions like this one are part of a broader effort by Ashutosh Financial Services to close that gap, one clear explanation at a time, reinforcing the idea that sound financial decisions begin not with product choices, but with genuine understanding.
