According to data from the United Nations, there are 272 million international migrants in the world, and 6.4% of them are Indian. NRIs (Non-Resident Indians) make a considerable economic contribution to India. It supports the Indian economy on a large scale, notably through increasing national savings, capital accumulation, investment, and other factors that lead to domestic job creation.
In the same way they are also a big headache for tax authorities as many of them evade taxes intelligently using the loopholes of our taxation system.
Non-Resident Indians (NRIs) are people of Indian descent who reside outside of India and different tax laws apply to NRIs and Indian residents, according to the Income Tax Act of 1961, still some non-resident Indians (NRIs) have become active in escaping from the enhanced scrutiny of Indian tax authorities.
The Prevention of Money Laundering Act (PMLA), 2002 which had been extended recently, and as a result, Chartered Accountants (CA), Company Secretaries (CS), and Cost and Management Accountants (CMA) are now subject to the anti-money laundering laws.
At this instance, The Prevention of Money Laundering Act, 2002 will apply to financial transactions made by Chartered Accountants, Company Secretaries, and Cost and Works Accountants in the course of their professional activities on behalf of their clients which also include Non-resident (NRI).
It is arranged in such a way that these experts may help their clients, especially the NRIs to buy and sell immovable property, which involves financial considerations like due diligence, valuation, potential tax consequences, and deal structure.
So beyond the CA,CS and CMA the NRIs are also subjected to these provisions. It is like verificatory duty upon them to ensure that the transactions of NRIs are complied with the PMLA regulations.
In such a way they have to verify the identity of the client, maintain records of the transaction, and report suspicious transactions to the relevant authorities. This also eases to procure the financial data related to the NRIs and to impose penalty in case of any default.
Hence, the NRIs will be compelled to produce the information related to their transactions through chartered accountants.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
