Home |Tax returns filing | I have been working abroad for five years now. I still live in Europe with my Non-Indian husband. With the money that I earned abroad, I paid for a flat to the developer through my Non-Resident External (NRE) account. However, four years after the initial payment, we realized a fraud and demanded a refund with interest and the developers obliged.However, the refund could only be made to the Non-Resident Ordinary (NRO) account. I need to send the money that I received back to Europe and I understand that I will be taxed for the entire refund and not just the interest. Is there any way to prevent this? What documents do I need to submit in order to make a remittance of less than INR 100,000? What services through banks or third parties are most safe and economical?

I have been working abroad for five years now. I still live in Europe with my Non-Indian husband. With the money that I earned abroad, I paid for a flat to the developer through my Non-Resident External (NRE) account. However, four years after the initial payment, we realized a fraud and demanded a refund with interest and the developers obliged.However, the refund could only be made to the Non-Resident Ordinary (NRO) account. I need to send the money that I received back to Europe and I understand that I will be taxed for the entire refund and not just the interest. Is there any way to prevent this? What documents do I need to submit in order to make a remittance of less than INR 100,000? What services through banks or third parties are most safe and economical?

Vandhana
Answered on February 05,2020

Whether the amount received from the builder will be taxable or not will depend upon the arrangement between the two parties—you and the builder. You will need an expert to review whether such an amount will be taxed as per Indian laws and/or the laws of the country of which you are now a resident, based on the agreement made for such a purpose.

Remittances from NRO accounts are allowed up to $1 million in a financial year. However, you need to submit certain documents and also a certificate from a chartered accountant. Whether or not these documents will be required depends on the nature of the payment. You need an expert to first ascertain the taxability of the amount and also prepare the necessary documentation.

You can avail professional services of a chartered accountant. Once the documents are submitted to your bank, the remittance will take place.

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