Banking, Money and Taxes in India
Banks in India have somewhat of a reputation for cumbersome bureaucracy. But most of them provide convenient services once expats get through the red tape.
Paying taxes can also be challenging but is much easier with the help of a local specialist.
Money in India
The official currency in India is the Rupee, abbreviated as INR or Rs, and it's controlled by the Reserve Bank of India (RBI).
The rupee is subdivided into 100 paise, but paise coins are hardly in circulation anymore. So, while items can cost 50 paise in theory, the amount paid is always one rupee – expats shouldn't be alarmed when they don't get change.
In fact, getting change is often difficult, so keeping a stock of smaller denominations is wise.
Notes: 5 INR, 10 INR, 20 INR, 50 INR, 100 INR, 500 INR and 1,000 INR
Coins: 1 INR, 2 INR, 5 INR and 10 INR
Another thing expats will have to get used to is the Indian numbering system, where 100,000 is called one lakh and 100 lakhs is one crore or ten million.
Globally, commas are put after every three digits when dealing with large numbers. In India, a comma is placed after every two digits past the 100,000 mark (1,00,000). This can be confusing, especially when dealing with financial statements.
Banking in India
The Indian banking sector is robust and offers numerous services in public, private and international banks. ATMs and bank branches are easily accessible in major cities and towns, credit cards are widely accepted and most banks offer Internet banking services. But it's still advisable to carry cash when travelling away from cities.
Most ATMs also have deposit facilities for cash and cheques, and allow customers to make utility bill payments.
Opening a bank account
Most banks offer a non-resident (NRO) savings or current account for expats who earn an income in India. Features vary between banks but account holders will at least be provided with debit or credit cards and cheque books as well as Internet and phone banking.
Most NRO accounts will require expats to maintain an average quarterly balance. While the amount may differ depending on the bank, failure to maintain the balance will result in a penalty fee.
To open a bank account, expats will generally need to provide proof of identity, proof of address and copies of their passport and visa. So, to open an account, they'll first need to secure accommodation and complete their FRRO registration.
Many expats have their company open an account for them, which is often with an international bank.
Major currencies are easy to change throughout India. Exchange rates at private bureaux de change are often better than banks, while locals frequently exchange currency at private money changers. These are widespread, usually open for longer hours than banks, and often double as Internet cafés, jewellers and travel agents.
Wherever expats exchange their money, they should check that the notes they receive aren't damaged in any way – getting a soiled or torn note accepted can be difficult.
Taxes in India
Expats who live in India for 182 days or more in a year are considered to be tax residents and will have to pay tax on their local income to the Ministry of Finance's Income Tax Department.
Personal income tax in India is progressive up to 30 percent with an additional Education Cess (an additional tax liability) of three percent.
The Indian tax year in India lasts from 1 April to 31 March. All individual taxpayers have to file an individual tax return and are assessed separately. Some companies file their employees' returns for them, but expats can also do this online. Given that tax in India is relatively complicated, expats who aren't especially tax-savvy may want to enlist the help of an accountant.