The most awaited Cross Border Tax judgment in the matter of Vodafone is out and the Supreme Court of India has today set aside the Bombay High Court Judgment asking Vodafone to pay Income tax of USD 2 Bn. 

Juggling finances in one country is bad enough; having to do it in two can be baffling. When it comes to filing taxes, NRIs find themselves in this unenviable position as the Income tax rules for NRIs are different from those that are valid for residents. Here's a quick guide to NRI Taxation taxation. 

Currently, India has DTAA with around 80 countries. We will look at DTAA provisions that India has with UK and US. Broadly, NRIs will be able to avail a reduced TDS rate on certain incomes in India. If you are availing this lower rate, you would need to submit a tax residency certificate (issued by the country of your residence) to the payer. 

The Reserve Bank today said Indians who have non-resident accounts in the country can now hold them in any currency which is fully convertible. 

The move is likely to help NRIs/Persons of India Origin as it will give them more options in the holding of accounts, and lessen the risk from fluctuations in major currencies. 

Earlier, FCNR(B) account holders were allowed to hold accounts in only certain currencies such as the Pound Sterling, US dollar, Japanese yen, euro, Canadian dollar and Australian dollar. 

"...it has been decided that Authorised Dealer banks in India may be permitted to accept Foreign Currency (Non- Resident) Account (Banks) deposits in any permitted currency. It may be noted that 'Permitted currency' for this purpose would mean a foreign currency which is freely convertible," RBI said in a notification. 

"The Committee to Review the Facilities for Individuals under Foriegn Exchange Management Act, 1999 in its Report has recommended that FCNR(B) accounts may be permitted to be opened in any freely convertible currency," RBI said. 

RBI also said that any citizen who was earlier residing in a foreign country can own or transfer property or other assets in that nation if it was acquired during the time of his residence there. 

"... a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India," RBI said. 

In a clarification issued by it regarding repatriation of income and sale proceeds of assets held abroad by NRIs who have returned to India permanently, RBI said an investor can retain and reinvest the income earned on investments made under the Liberalised Remittance Scheme

The grass is not really greener on the other side. And many Indians abroad are figuring it out the hard way. Faced with a gloomy economic and career prospects, some are packing their bags and heading back to test the job market. 

Though finding a job would be easier in India, especially for those with good degrees and employment background, figuring out the tax liability - especially in the initial years - may be a daunting task. If you are returning to India for employment, there are some tax issues you have to consider before taking the final decision. 

This is crucial because the taxability of overseas income (such as rental income from property outside India) for returning Indians largely depends on their residential status in India. Planning the timing of one's return is very important.