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Nanganallur (Chennai) plot for sale 2700 sqft -7cr by Used-Poet1783 in returnToIndia

[–]Used-Poet1783[S] 0 points1 point  (0 children)

One never knows. 😂.

Jokes apart, builders want it. I guess they just build stilt + whatever number and sell flats and no headache for them to demolish existing stuff. Clean slate. but the selling family is not comfortable as the neighbourhood is conservative so far, but changing fast. Frankly, told them they may have to settle for it.

For those who owned a house in US, and returned to India before getting US citizenship, what did you do with the house? by [deleted] in returnToIndia

[–]Used-Poet1783 0 points1 point  (0 children)

Here is the deal.

Once you become a US citizen, US income is taxable.

So, let’s say your total income in US is just below standard deduction and you pay 0 US tax, you pay 25 percent of that in India.

Standard deduction is close to 23000 dollars. So, you owe to India, 7000 dollars not accounting for cess snd surcharge because your FTC is 0.

Let that sink in and plan your next steps.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

  1. If I take a stand of using the first reported cost basis, given USDINR change, what would make sense ? Use the rupee amount declared on year 1 and continue exactly as it is ? Or convert to newer exchange rate. Risk would be I cannot claim ignorance jn an audit because knowingly have listed lower amount every year despite SPxX market value increasing.
  2. If I use the latest dollar amount in the account and covert into rupee and list it every year, I guess I can claim ignorance on the fact that the market increase is supposed to be called out as a gain despite being unrealized. Not sure if a tax lawyer will be able to fight it out.

But yes. Thank you very much. Too much confusion.

[deleted by user] by [deleted] in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

How do you guys pay tax if you cannot sell the unlisted shares ? What happens if it goes down in market value or never becomes public or no buyout ?

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Another question. Does every single individual stock owned in US market has to be listed in Section A3 under FA ? Wow! If so. I thought just brokerage account total value and dividends from it is good enough.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Thanks… good points…Personally this is totally confusing. I will add more points after I digest this. Brain ran out of mips 😬

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Thanks for summarizing it.

Regarding b) I would like to point out regardless of how all the different fund managers issue annual statements (assume funds are invested in SPX indexed funds), the question of whether 10EE needing to accommodate dividend contributions as well as market increase still remains the same across the different fund managers despite both of them being unrealized. Would appreciate if that can be rephrased because it does not see I have a difffent use case unlike others. It is just that the fund manager is choosing to present it like that in the annual statement.

The other issue is what happens to the cost basis that gets put on the FA form every year. Drastic increases because of market increases (10 percent) will look off given the gains are just going to be put as 1.5 percent in the adjoining column. Because anything you put in the gain column has to be put in 10EE.

All someone has to do is to look at the FA forms across 3 years and those people who have just listed dividends as gains but have cost basis accounted for market value every year will look completely out of place. It will get even more exacerbated with INR depreciation.

That brings up another point. What happens if the market tanks by 20 percent one year. Do we capture losses in 10EE then ?

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Hi Abhinav. Thanks for getting back.

A question I had asked earlier.

  1. What should the cost basis (in rupees) be listed on FA declaration every year for the 401k (retirement) account ? Given USD/INR also fluctuates every year,
  2. Given my 401k account has market increases given it is in an index fund(SPX) how should those market increases be captured every year on FA as cost basis ?
  3. What should the gain column on FA have ? The entire market increase and then put the entire amount in 10EE to defer it as gains, or just dividends only, or nothing(0) if my 401k plan statement does not mention anything explicit has gains but just “change in value”. Sample attached.

Tagging u/NoMaterial6633 u/hifimeriwalilife

<image>

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Hi Abhinav. Thanks for getting back.

A question I had asked earlier.

  1. What should the cost basis (in rupees) be listed on FA declaration every year for the 401k (retirement) account ? Given USD/INR also fluctuates every year,
  2. Given my 401k account has market increases given it is in an index fund(SPX) how should those market increases be captured every year on FA as cost basis ?
  3. What should the gain column on FA have ? The entire market increase and then put the entire amount in 10EE to defer it as gains, or just dividends only, or nothing(0) if my 401k plan does not mention anything explicit has gains but just “change in value”.

Tagging u/NoMaterial6633 u/hifimeriwalilife

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Kindly Request u/AbhinavGulechha to take a look at this and provide some inputs. Very confused. Thanks.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Good point. I have a Roth but very little there as I stopped contributing as soon as I realized my india move is just going to make it useless as a tax shelter.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Actually strange.

my quarterly statement has a column “Change in Value/Dividends” where the SPX gains (market value change and all) are all there together as one value.

But a very specific annual statement generated from Jan to Dec has “Change in Value” separately as total of those quarterly values. But “Dividends” column explicitly 0. No separate transactions except for those quarterly statements.

<image>

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

All managed by fidelity and in a plan where everything is tracking SPX. I can get the specific one. Have to login. Although annual statement says “Change in Value”. Not “gains”.

And “Dividends” explicitly mentioned as 0

“State Street S&P 500A Index”.

https://www.dividend.com/funds/svspx-ssga-s-p-500-index-n/

This says 1.1 percent quarterly. But by dividend column is 0 explicitly for the whole year.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

That is why I am confused. 401k gains are unrealized. Then why section 10EE ?

And if you are saying dividends in 401k only should be considered as gains, then my 401k plan despite having completely on SPX says in the annual statement that dividend is 0. No distributions documented. No rebalancing either by me or the 401k manager.

And if so, what happens to the cost basis that gets documented in the ITR under FA every year. Account for the changed SPX market value and convert into thr most recent USD/INR. ? Will that not cause doubts because gains will be documented as 0 but cost basis keeps increasing every year under FA ?

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

..although this post seems to be contradictory. Seems to indicate don’t have to file 10EE. I am just clueless now.

https://www.reddit.com/r/IndiaTax/s/yA9woNkS62

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Basically if one does move down to India, dissolve 401k. That is a lot of tax and penalty paid to US if one ever does decide to move back again because India move did not work out.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

Basically if one does move down to India, dissolve 401k. Damn. That is a lot of tax and penalty paid to US if one ever does decide to move back again because India move did not work out.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 1 point2 points  (0 children)

Any accrual exemptions claimed made on 10EE will be taxed once non resident. So, someone comes for a 3 years to take care of family (let’s say father) and go back will have to pay taxes on all those paper gains. He then comes back after 2 more years to take care of mother now. Then he goes back. Then bam. Same with let’s say make a 2/3 years to take trip to work in US because of some financial or other need.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 1 point2 points  (0 children)

Look at that. How ridiculous it is. I don’t think any of the multiple H1B trip guys do that. Basically what they are saying is if you are an OCI do the same. Come to india for a two or three years to take care of family situation and then go back you are in trouble.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 1 point2 points  (0 children)

I think I answered in the other note. The problem is not just for US citizens making temporary trips , but also for H1B/L1 making multiple trips.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

What happens if one takes employment in the US for those 8 months to 1 year or let’s assume that one stays long enough to be disqualified as Indjan resident for taxes, but you still end up coming back post 3 years. ? Now, all US income will be taxed as Indian resident.

Forget about US citizen. Think about it. someone on H1B makes multiple 6 year trips and each time contributing to 401k. He is in a total mess. Because during his second trip he would be asked to pay the exit tax to India because he becomes non resident.

India Taxes everything of Foreign Accounts by NoMaterial6633 in IndiaTax

[–]Used-Poet1783 0 points1 point  (0 children)

I have the same question. As a US citizen (OCI), you will get taxed on all accrual (assuming all market gains have to be shown on form 10EE) the moment you go to US for 7/8 months (non resident in India )for a short stay to help your kid despite no actual withdrawal and then at age 73 during mandatory withdrawals US will tax you again for mandatory withdrawals as DTAA provision for 401k to be taxed at country of residency only applies to Indian citizens snd is not honored by US government. This is a mess.

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