NRI Problems: What should be done to expedite tax refund process?

I filed a tax return last year claiming a refund. I am told that refunds are now being processed and paid electronically by the tax department. What should be done to expedite the refund process?
T.R. Kanade, Dubai
If you have opted for getting the refund directly into your bank account, the refund is received expeditiously. Under the ECS facility, you can monitor the refund process by logging into the website of the Tax Information Network. On entering the permanent account number and the assessment year for which the refund is due, you will be able to check the status of your refund.
If you get the message that the refund is not determined, it would indicate that the refund has not been processed and the tax department is still working on it. In case you get the message that the refund is paid, it would mean that the refund is adjusted against any outstanding tax demand of earlier years as per the records of the tax department. This message may also indicate that the refund order has been despatched but it may have gone to the wrong address.
If you are asked to contact your assessing officer in the status message, it implies that the Central Processing Centre (CPC) has processed the return but it has been referred to your assessing officer who may have initiated scrutiny proceedings in respect of your return. In that case, the CPC cannot process the refund and you will have to wait till the assessment order is passed under section 143(3) of the Income-tax Act.
 
Can foreigners invest in real estate development companies on an assured return basis? If so, many foreign entities would be interested in investing in Indian companies involved in real estate development.
L.R. Panikar, Manama
According to rules pertaining to foreign direct investment in real estate development companies incorporated in India, investment can be made by foreign entities only through equity participation or through debentures which are compulsorily convertible. Investments in instruments with assured returns are prohibited. Therefore, foreign investors should be careful while going into any structured transactions which guarantee fixed return on investments.
Courts have taken a view that the spirit of the foreign direct investment regulations cannot be disregarded. The structures must be in compliance with these regulations. Recently, the Bombay High Court refused to grant any relief to a foreign entity, which sought to enforce recovery of its investment together with assured rate of return in respect of quasi-debt instruments.
 
My mother who is an Indian citizen and residing in India proposes to invest her rupee funds in a property in Singapore. Is she permitted to do so and would she be taxable on the rental income which she may earn?
P. Rangachary, Doha
Under the liberalised remittance scheme, an Indian citizen who is resident in India can remit an amount upto $250,000 in every financial year. This limit has now been doubled from the earlier limit of $125,000. The funds so remitted through banking channels can be utilised for opening a foreign currency account with a bank outside India, making investments abroad, setting up subsidiaries and joint ventures, or investing in property overseas. Limits for release of exchange at the time of foreign travel, gifts to individuals, etc. are now subsumed under the limit of $250,000. However, additional amount can be released for medical treatment or university education.
Your mother can, therefore, remit from her bank account funds necessary for purchase of a house. However, any rental income earned by her would be taxable in India. Likewise, capital gains made on sale of the property in future would also be taxable in India subject to the provisions of the double tax avoidance agreement entered into between India and Singapore.
 
The writer is a practising lawyer specialising in tax and exchange management laws of India.

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