3

I moved away to Europe almost ten years ago. To be honest, my father handled most of the taxation legalities for me. I moved here, began my life and lived live normally. Now that I've married a citizen here and tried to register my marriage, a lot of hidden issues have now surfaced.

My father is rather well off and the company is family owned. I left home with a meagre amount of money to begin my life < 1000€ back then. Over the years, he has been managing my income-tax file and paid me a "salary" of 6,00,000 INR a year. Since they've been managing my file, they've filed returns on my behalf as well and paid all the due taxes normally in India.

I don't have an NRO/NRE account and I've never files taxes as an NRI. I haven't ever declared that I'm residing abroad and in Europe, I've continued to have my day job and pay the due taxes normally as well.

Have I committed a crime or fraud? How should I work to resolve this matter? My cluelessness has come to haunt me and I'm rather afraid of this mess. Thank you.

(Sorry to be posting anonymously-ish. I have a strong profile on StackOverflow being the top 2% of the community there but I would rather not have this associated with my profile there.)

  • 2
    Legal advise is best obtained from a specialized attorney and not from anonymous people on the internet. – Philipp Dec 13 '16 at 13:17
  • I agree with you and wouldn't take any internet advice without a pinch of salt but I feel that having some sort of understanding about the magnitude of this problem would helpful before rushing to an attorney. – Meekrab Dec 13 '16 at 13:43
  • 3
    I'm voting to close this question as off-topic because , if "have I committed a crime" belongs anywhere on SE, it belongs in the Law area. If you rephrase to ask whether you should have been filing taxes in this situation, as a tax question rather than a legal question, I'd vote to reopen. – keshlam Dec 18 '16 at 3:35
6

I haven't ever declared that I'm residing abroad and in Europe

There is no declaration you need to make in India that you are Non-Resident. You acquire the status once you are out for more than 182 days.

I don't have an NRO/NRE account and I've never files taxes as an NRI.

Not having NRO/NRE account is fine. Not filing taxes as NRI is advised, however if you don't have any taxable income, it is not mandatory to file returns as NRI. You should not be holding Ordinary / Normal Savings account as NRI. If you have not converted your Indian Account to NRO, you have violated the provisions of Foreign Exchange Management Act.

Over the years, he has been managing my income-tax file and paid me a "salary" of 6,00,000 INR a year. Since they've been managing my file, they've filed returns on my behalf as well and paid all the due taxes normally in India.

This has created several issues. First its fraud by the company to show they are paying you a salary. Second it is fraud to file returns on behalf of someone without explicit authorization.

It also complicates things further as quite a few [most?] European countries tax an individual on Global income. So if hypothetically you say you were providing some consultancy service to your father company and getting paid; You would have to declare this in your country and pay taxes on it.

Get a CA and a lawyer to sort this out. At-least stop this from happening in future and figure out the best course of action for correcting the previous stuff.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.