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Ronuncing PR & withdrawing CPF

Relocating, travelling or planning to make Singapore home? Discuss the criterias, passes or visa that is required.
radramesh
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Ronuncing PR & withdrawing CPF

Postby radramesh » Fri, 18 Mar 2011 6:49 pm

Hi all,

Greetings.

I moved out of singapore more than 4 years from now and my PR is valid for another 6 years, also I have settled my taxes before I leave the country for another assignment.
Based on above circumstance still I can surrender PR and withdraw my CPF? Should i need to submit or notify anything to IRAS again? please advice.

Should I pay tax in INDIA if my CPF money is transferred to my account? If anyone done it earlier or similar situation please let me know the procedure.

Cheers
Ramesh

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Re: Ronuncing PR & withdrawing CPF

Postby FaeLLe » Mon, 28 Mar 2011 3:14 pm

radramesh wrote:Hi all,

Greetings.

I moved out of singapore more than 4 years from now and my PR is valid for another 6 years, also I have settled my taxes before I leave the country for another assignment.
Based on above circumstance still I can surrender PR and withdraw my CPF? Should i need to submit or notify anything to IRAS again? please advice.

Should I pay tax in INDIA if my CPF money is transferred to my account? If anyone done it earlier or similar situation please let me know the procedure.

Cheers
Ramesh


You know if you renounce PR and withdraw CPF you are "burning bridges" and might never be able to enter the country ever to work?

There is no guarantee that you will ever be issued a work visa again.

Just consider it a sunk cost, leave your money here for a rainy day.
Consider it retirement funding :D

Btw the process has been described many times on this forum, use the search feature.

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Postby sundaymorningstaple » Mon, 28 Mar 2011 4:18 pm

Actually, I don't ever remember seeing the tax implications of bringing the money into India on here. Might be good if somebody does have some info in that regard.

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Postby FaeLLe » Mon, 28 Mar 2011 9:40 pm

sundaymorningstaple wrote:Actually, I don't ever remember seeing the tax implications of bringing the money into India on here. Might be good if somebody does have some info in that regard.


It defends on the tax status of the individual.

If he is considered as a non resident indian (for year of assessment), usually > 6 months April to may then the cpf withdrawal would be considered as foreign income that is not taxable.

If individual is resident indian then the withdrawal will be considered as a lump sum income and he will have to pay taxes as per applicable tax slab.

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Re: Ronuncing PR & withdrawing CPF

Postby singaporeflyer » Mon, 28 Mar 2011 9:43 pm

radramesh wrote:Hi all,

Greetings.

I moved out of singapore more than 4 years from now and my PR is valid for another 6 years, also I have settled my taxes before I leave the country for another assignment.
Based on above circumstance still I can surrender PR and withdraw my CPF? Should i need to submit or notify anything to IRAS again? please advice.

Should I pay tax in INDIA if my CPF money is transferred to my account? If anyone done it earlier or similar situation please let me know the procedure.

Cheers
Ramesh


Since your CPF is from your income when you were working in SG, if you have paid taxes in SG when you were working here , you need not pay taxes for the same in India .

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Re: Ronuncing PR & withdrawing CPF

Postby FaeLLe » Mon, 28 Mar 2011 9:49 pm

singaporeflyer wrote:
radramesh wrote:Hi all,

Greetings.

I moved out of singapore more than 4 years from now and my PR is valid for another 6 years, also I have settled my taxes before I leave the country for another assignment.
Based on above circumstance still I can surrender PR and withdraw my CPF? Should i need to submit or notify anything to IRAS again? please advice.

Should I pay tax in INDIA if my CPF money is transferred to my account? If anyone done it earlier or similar situation please let me know the procedure.

Cheers
Ramesh



Think it's slightly more complicated considering this is a lump sump early withdrawal of what india calls provident fund.

As per indian IT laws withdrawal of provident fund is taxable...
Agreed india and SG have a double taxation evasion treaty but the other person never paid tax on his cpf withdrawal which technically is income..

(edited due to formatting issues from posting using iPhone).
Last edited by FaeLLe on Mon, 28 Mar 2011 9:57 pm, edited 1 time in total.

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Re: Ronuncing PR & withdrawing CPF

Postby singaporeflyer » Mon, 28 Mar 2011 9:53 pm

FaeLLe wrote:
singaporeflyer wrote:
radramesh wrote:Hi all,

Greetings.

I moved out of singapore more than 4 years from now and my PR is valid for another 6 years, also I have settled my taxes before I leave the country for another assignment.
Based on above circumstance still I can surrender PR and withdraw my CPF? Should i need to submit or notify anything to IRAS again? please advice.

Should I pay tax in INDIA if my CPF money is transferred to my account? If anyone done it earlier or similar situation please let me know the procedure.

Cheers
Ramesh


Think it's slightly more complicated considering this is a lump sump early withdrawal of what india calls provident fund.

As per indian IT laws withdrawal of provident fund is taxable...
Agreed india and SG have a double taxation evasion treaty but the other person never paid tax on his cpf withdrawal which technically is income..

Since your CPF is from your income when you were working in SG, if you have paid taxes in SG when you were working here , you need not pay taxes for the same in India .


CPF contribution was already from his earlier income ?

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Re: Ronuncing PR & withdrawing CPF

Postby FaeLLe » Mon, 28 Mar 2011 10:04 pm

singaporeflyer wrote:
FaeLLe wrote:
singaporeflyer wrote:
radramesh wrote:Hi all,

Greetings.

I moved out of singapore more than 4 years from now and my PR is valid for another 6 years, also I have settled my taxes before I leave the country for another assignment.
Based on above circumstance still I can surrender PR and withdraw my CPF? Should i need to submit or notify anything to IRAS again? please advice.

Should I pay tax in INDIA if my CPF money is transferred to my account? If anyone done it earlier or similar situation please let me know the procedure.

Cheers
Ramesh


Think it's slightly more complicated considering this is a lump sump early withdrawal of what india calls provident fund.

As per indian IT laws withdrawal of provident fund is taxable...
Agreed india and SG have a double taxation evasion treaty but the other person never paid tax on his cpf withdrawal which technically is income..

Since your CPF is from your income when you were working in SG, if you have paid taxes in SG when you were working here , you need not pay taxes for the same in India .


CPF contribution was already from his earlier income ?


Dont think the indian government recognizes CPF for what it is (as being an equivalent to provident fund).

Almost sure that if you are a resident they will consider you as coming in possesion of a lump sum of money / income.

The only thing similar to CPF what the Indian gahmen would consider are the Employee Provident Fund or Public Provident Fund.

More info at: http://www.rediff.co.in/getahead/2006/may/02ppf.htm

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Postby sundaymorningstaple » Mon, 28 Mar 2011 10:06 pm

Only a portion of the CPF is from previously reported income. The balance is the Employers contributions which was tax exempt in Singapore, so to me it would seem that that portion along with any/all interest earned on same would be taxable to one country or the other. As it's not taxable in Singapore, maybe it is in India?

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Re: Ronuncing PR & withdrawing CPF

Postby revhappy » Mon, 28 Mar 2011 11:53 pm

FaeLLe wrote:
singaporeflyer wrote:
FaeLLe wrote:
singaporeflyer wrote:
radramesh wrote:Hi all,

Greetings.

I moved out of singapore more than 4 years from now and my PR is valid for another 6 years, also I have settled my taxes before I leave the country for another assignment.
Based on above circumstance still I can surrender PR and withdraw my CPF? Should i need to submit or notify anything to IRAS again? please advice.

Should I pay tax in INDIA if my CPF money is transferred to my account? If anyone done it earlier or similar situation please let me know the procedure.

Cheers
Ramesh


Think it's slightly more complicated considering this is a lump sump early withdrawal of what india calls provident fund.

As per indian IT laws withdrawal of provident fund is taxable...
Agreed india and SG have a double taxation evasion treaty but the other person never paid tax on his cpf withdrawal which technically is income..

Since your CPF is from your income when you were working in SG, if you have paid taxes in SG when you were working here , you need not pay taxes for the same in India .


CPF contribution was already from his earlier income ?


Dont think the indian government recognizes CPF for what it is (as being an equivalent to provident fund).

Almost sure that if you are a resident they will consider you as coming in possesion of a lump sum of money / income.

The only thing similar to CPF what the Indian gahmen would consider are the Employee Provident Fund or Public Provident Fund.

More info at: http://www.rediff.co.in/getahead/2006/may/02ppf.htm


1)1st thing you need to establish is whether you will be considered an NRI or not for the financial year when you return to india and take the CPF monies with you.
You can look up for the definition of NRI for IT purposes. Its terribly complicated for the year when you are going to return to India permanently.

You can read the derinition here:
http://www.femaonline.com/nricms.php?id=3

This is what it reads:

[i] An individual residing abroad is defined as a Non-Resident in a Financial Year under the IT Act if his stay does not exceed 181 days.

[ii].However for determining residential status of an NRI returning to India for permanent settlement , for the year of return, besides the stay not exceeding 181 days an additional condition is applicable that of stay not totaling to 60 days or more in relevant year if his stay in earlier 4 years totaled to 365 days or more.


If you are an NRI then you are exempt from paying income tax on the cpf monies, if not look at item 2 below.

2)Next thing you need to find out is if you are not an NRI for the financial year you return to india and you take the CPF monies with you, will the entire amount be considered as taxable income for that financial year. This you need to find out from a chartered accountant.


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