naturalisation and work in India

basis · Post by **basis** » Fri Jan 06, 2006 5:51 am

If you are a PIO card holder do you need to take an employment visa from the FRRO to be able to take up employment in India ? Or are there any other formalities - I thought just having a PIO card is sufficient.

lemess · Post by **lemess** » Fri Jan 06, 2006 7:26 am

basis wrote:If you are a PIO card holder do you need to take an employment visa from the FRRO to be able to take up employment in India ? Or are there any other formalities - I thought just having a PIO card is sufficient.

You don't need any other visa - that's the whole point of the PIO card. You can just go there and work.

basis · Post by **basis** » Sat Jan 07, 2006 4:57 pm

Thanks lemess. Can the pio card holder start own business or work as a freelance professional. Or he /she needs only to be empoyed ?

basis · Post by **basis** » Tue Jan 17, 2006 12:57 pm

Ali - Are you planning to convert PIO to OCI within India?

Could you please share your experience so far - bank accounts, stock market investments, real estate - residential - what's the treatment for PIO card holders ?

Does anyone know whether PIOs can do their own business or work as contractor in India?

aali · Post by **aali** » Tue Jan 17, 2006 3:54 pm

Basis,

so far so good.

as imentioned in my earlier post, as long as you earn in india you are considered a resident for banking purpose, you can open normal bank accounts.

on the PIS investment scheme, the guys have confirmed nothing need to be done, i can continue as it is.

real estate- yes you can buy and own and sell property like any one else, except for agriculture land.

In fact the only issue I have experienced so far is you might find it difficult to get a bank loan/credit card as you are 1) a foreigner 2) have stayed in india for less than 6 months. Once your stay is more than 6 months these should be ok i guess, that is what the bankers say. So, if any of you guys are planning to move in as a pio, remember to have enough to buy your car on down payment! And the house can wait for a few months..!

cheers...

basis · Post by **basis** » Wed Jan 18, 2006 4:54 am

Thanks a ton Ali. By the way what's PIS?

And are you considering converting PIO to OCI ?

basis · Post by **basis** » Sat Jan 21, 2006 7:09 am

Hi Ali,

Can you please let us know followings based on your experience so far -

1. Do you have to pay taxes in the UK as well for incomes / gains in India ? Do you have to file return ?

2. Are you able to contribute to PF, pension schemes in India through your employment ?

3. Did you have to do any other process / special documentation other than PIO card to take up job in India.

4. Can you repay loans including housing loand out of your Indian salary?

Thanks in advance.

basis

aali · Post by **aali** » Sun Jan 22, 2006 4:30 am

basis,
here are the answers.

1. taxes - you pay taxes in either country , courtsey the double taxation treaties between both countries. Where you pay it depends on where you spend most of your time in that purticular year.

2. PF & Pension in india- yes , you do contribute. remember, you are a RESIDENT in india for all practical purposes. So all these things as well as other similar ones work exactly the way they did while you were a part of the indian system

3. No, just PIO card is enough, you need no additional documents to take up a job in india. however as a pio card holder you need to register with FRRO if your stay is more than 6 months.

4. Loans- Afraid I really do not know about this.

5. OCI - i am evaluating the pros and cons, intend to go slow at the moment. Can you share your views on pros and cons of PIO vs OCI please?

cheers..

basis · Post by **basis** » Sun Jan 22, 2006 6:31 am

Thanks a lot Aali. Which part of India are you working in currently ?

OCI - pros and cons I can think of. Other members please add to it

Pros

1. dont need to register with FRRO after 6 months. Although this is only once in a lifetime activity - you still need to keeo them update if your permanent address etc change
2. dont need to remember when PIO card expires (although it is long way away). OCI is lifelong visa
3. (Strangely enough...) ability to regain Indian citizenship after 5 years
4. No need to carry separate PIO card while doing immigrations
5. Psychologically and socially you may be better of telling people you are 'dual or overseas citizen'.
6. At the moment since you are in India - you may be able to get PIO to OCI conversion quicker because not many people would be in India who are on PIO. Costs for conversion to OCI are low even by Indian standards.

Cons
1. OCI may not yet clearly be defined in practical terms. So we would be the first to experiment. Personally don't think it would cause much of a difference
2. OCI may take away UK consular protection while in India due to misleading defininition of OCI by Indian authorities to the world that it is dual citizenship
3. Once the UK passport expires you will have to get the U visa (OCI sticker) transferred to new passport. Even for PIO you need to get the
PIO card amended if your passport specified in the PIO card expires.

basis · Post by **basis** » Wed Jan 25, 2006 7:54 am

aali wrote:Basis,

so far so good.

as imentioned in my earlier post, as long as you earn in india you are considered a resident for banking purpose, you can open normal bank accounts.

on the PIS investment scheme, the guys have confirmed nothing need to be done, i can continue as it is.
cheers...

Aali - I understand for PIS scheme one needs to have NRE / NRO account. If for banking purpose you are treated as resident then how can one continue to under PIS scheme.

That means PIO is considered as resident for banking purpose and non-resident for stock investment purpose...[/quote]

aali · Post by **aali** » Wed Jan 25, 2006 2:14 pm

Aali - I understand for PIS scheme one needs to have NRE / NRO account. If for banking purpose you are treated as resident then how can one continue to under PIS scheme.

That means PIO is considered as resident for banking purpose and non-resident for stock investment purpose...

[/quote]

A bit of grey area there actually, logically PIS should not be allowed as you are treated as a resident for all financial purposes, i m trying to get a hold on this one..

basis · Post by **basis** » Sat Jan 28, 2006 9:23 am

Aali - I enquired with a invesntment specialist and he told me there are only two categories Resident Indians and no-resident Indians.

Resident Indians cant use PIS and NRIs need to use PIS to make investments in the secondary market in India.

PIOs in India are treated as resident Indians for invesment purpose and hence cannot use PIS. They can directly open normal account. They should notify the change of status to the relevant banks, brokers.

rogerroger · Post by **rogerroger** » Sat Jan 28, 2006 8:42 pm

do you guys think one would be treated at par when applying for a job in india with an OCI instead of full indian citizenship?

lemess · Post by **lemess** » Sun Jan 29, 2006 5:00 am

Of course one would be. No one cares what version of the stamp you carry as long as you are legally allowed to work in India and are able to perform your job. PIO/OCI/XYZ - same diff.

basis · Post by **basis** » Sun Jan 29, 2006 1:03 pm

Lemess - Are you sure ? Do you know anyone working in India with PIO other than Aali ?

Two other queries -

Can a PIO / OIC be self-eployed in India ? Can they start a business of their own ?

Are the restrictions on PIOs - e.g. board level appointments etc are applicable for OCIs as well ?

basis · Post by **basis** » Sun Jan 29, 2006 1:47 pm

basis wrote:Aali - I enquired with a invesntment specialist and he told me there are only two categories Resident Indians and no-resident Indians.

Resident Indians cant use PIS and NRIs need to use PIS to make investments in the secondary market in India.

PIOs in India are treated as resident Indians for invesment purpose and hence cannot use PIS. They can directly open normal account. They should notify the change of status to the relevant banks, brokers.

Oops I may be wrong. ICICI direct says a PIO resident in India also needs to use PIS. They have not told me about NRE though.

basis · Post by **basis** » Sun Jan 29, 2006 3:58 pm

aali wrote:basis,
here are the answers.

1. taxes - you pay taxes in either country , courtsey the double taxation treaties between both countries. Where you pay it depends on where you spend most of your time in that purticular year.
cheers..

Aali - Where can one find info on double taxation treaties. e.g. if I have salary in India, capital gains in india and I have spend more than 183 days in India during that year - do I pay tax on those only in India ? If I have any income in the Uk e.g rent on house property etc do I pay tax in the UK on that or in India ? Is there any website related to that ?

aali · Post by **aali** » Tue Jan 31, 2006 2:43 pm

one word answer on where to get the info is web....!!You need to go to respective country's tax department website.

To answer your specific question, according to Indian rules, which I guess is similar to the Uk ones, if you have stayed in india for more than half of the year "You have to pay taxes for not only your indian income , but your global income as well in India".

Now if you happen to have been taxed for the same earning in two countries, (depending on the way the tax collection works ), you are eligible for a refund from one of them provided they both are in to double taxation treaty...well do not ask me more about this part, as I have never been in that position and so have not gone in to the depths

To clear up go google...

basis · Post by **basis** » Wed Feb 01, 2006 7:14 am

For the benefit of those interested I am giving some useful links below -

http://en.wikipedia.org/wiki/Taxation_i ... ed_Kingdom

All UK derived income and gains are subject to UK taxation no matter the citizenship nor the place of residence of the individual nor the place of registration of the company. However, the UK income tax liability of an individual who is not resident or ordinarily resident in the UK is limited to any tax deducted at source on UK income, together with tax on income from a trade or profession carried on through a permanent establishment in the UK and tax on on rental income from UK real estate.

Individuals who are both resident and domiciled in the UK are additionally liable to taxation on their worldwide income and gains. For certain individuals, therefore, the UK is a tax haven: Being resident but not domiciled in the UK means that only income and gains remitted to the UK are taxed.
Domicile is a concept not entirely unique but nevertheless peculiar to UK tax law. An individual is domiciled in the UK if (s)he has an abiding attachment to the country. In UK law one's country of residence is a matter of testable fact; one's country of domicile is a grey area in law and is also harder to change.

http://www.direct.gov.uk/BritonsLivingA ... chk=yThhza

http://www.hmrc.gov.uk/cnr/

When are you no longer a UK resident?

You normally stop being a UK resident from the day after your departure:

if you leave the UK permanently or

you leave for full-time employment abroad for at least a complete tax year (the year that starts on 6 April) provided that: you spend less than 183 days in the UK in any tax year; and your average visits to the UK are less than 91 days a tax year taken over a maximum of four tax years

Will you pay UK tax if you are not a UK resident?
You will still be liable for tax on income that arises in the UK. For example you might:

have income from investments in the UK
have a UK property and rent it out
receive a pension from the UK
However, the country in which you live or work may also want to tax you on the same income, depending on its own taxation laws. You should get in touch with the local tax authorities in the country where you live to check on this.

The UK has double taxation treaties with a number of countries, which are designed to ensure that you only pay tax once on your income.

Depending on the terms of any treaty, if you do pay UK income tax, you may be able to:

reclaim it
get exemption
use your personal allowances to offset some of the tax liability
More about double taxation on the HMRC website (opens new window)

basis · Post by **basis** » Wed Feb 01, 2006 6:47 pm

aali wrote: A bit of grey area there actually, logically PIS should not be allowed as you are treated as a resident for all financial purposes, i m trying to get a hold on this one..

Aali / anyone else - Did you get any further info on this. I am getting contradictory info.

And yes one more thing is if want to subscribe in primary market then does it have to be NRI DMAT acct or a resident DMAT account. e,g, if one wants to go for IPOs or Bonus Shares or ESOPs then of course PIS is not needed. But then should the DMAT acct be NRI or Resident one. Logically should be resident one but who knows ??

basis · Post by **basis** » Thu Feb 02, 2006 9:59 am

Does a PIO card holder need to register or fill special forms to stay in hotels in India ? Does he / she need to carry their passports / PIO cards to move around India or to be able to stay in hotels etc. ?

basis · Post by **basis** » Thu Feb 02, 2006 10:18 am

I asked some questions to a tax / legal NRI expert. May be the answers would be useful to others -

I have been working in the UK for past 6 + years on deputation by an Indian company. Last month I took UK citizenship.
>
>a) What are its impacts on taxation in India ? None
>c)I get a part of salary paid in India including PF etc and allowance in
>the UK? Can it continue even after I become UK citizen ? Looks no issue
>c) Now I am returning to India to work from India. I have got PIO card. I
>have been told I dont need employment visa to work in India or to do any business in India. And while in India I can work as a normal resident with PF, pension applicable to me. Is it correct ? Yes
>d) I have ESOPs vested in me by my company in India. Can I excercise those now once my citizenship has been changed and have a PIO card?
>Makes no difference.

lemess · Post by **lemess** » Thu Feb 02, 2006 10:59 am

basis wrote:Does a PIO card holder need to register or fill special forms to stay in hotels in India ? Does he / she need to carry their passports / PIO cards to move around India or to be able to stay in hotels etc. ?

Hotels tend to ask for passport numbers etc. only if your home address is outside India or you look and sound clearly foreign. Otherwise no one checks your nationality or immigration status etc.

In general because of hotel rates for foreign residents being substantially higher ( in $ terms) within india, if you are of indian origin and resident in india, it's not a good idea to mention your nationality. Just say indian if they even ask ( which they won't unless you have a home address outside India or don't seem Indian). Remember that a lot of Indians do not even have a passport and photo id is certainly not a requirement for staying in hotels.

it's not an issue in India ( unlike Europe where by law they take passport details for everyone checking in).

basis · Post by **basis** » Thu Feb 02, 2006 4:34 pm

Lemess - There is a register normally in which one has to specify the nationality and sign. Will it be an issue if one writes nationality as Indian there - legally or immigration law wise ?

basis · Post by **basis** » Thu Feb 02, 2006 5:32 pm

I am referring to http://www.immigrationindia.nic.in/regi ... ements.htm

Form To Be Filled Up By Foreigners Staying At Hotels :

Foreigners visiting India on Tourist Visa and not staying continuously for more than six months in India, are not required to register themselves. However, all foreigners including even tourists and others who are not required to register, are required to fill up a form called Form-C (Rule-14, Registration of Foreigners Rules, 1992) at the time of their stay in any hotel (which includes any boarding-house, club, dak bungalow, rest house, paying guest house, sarai and other premises of like nature). It is the responsibility of the hotel owner to get this form filled up by the foreigner.

Is the above applicable to PIOs / OCIs as well and how tedious is it ?

There is another provision - Report to be made to and by Hotel Keeper:
Rule-14 According to this Rule every hotel keeper/guest house shall submit a copy of the C form duly, filled with the information given by the foreigner in respect of his passport visa and nationality etc. as soon as may be, but not more than twenty four hours of the arrival of the foreigner, to the Registration Officer. If any foreigner is staying with his relatives it is the duty of that person to give report to the nearest police station or Foreigners Registration Officer with full particulars of the foreigners. Non compliance of these instructions/rules are punishable under Section 5 of Registration of Foreigners Act, 1939.

Section 14 This section is a penalty section which is as under : "If any person contravenes the provisions of this Act or of any order made there under, or any direction given in pursuance of this Act or such order, he shall be punished with imprisonment for a period which may extend to five years and shall be liable to fine."

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naturalisation and work in India