I have declared and paid taxes even for the interest earned from the loans (amounting to 1L) owed to my relatives and any fees I earn from international clients, even if they send it from personal accounts.
So, I have a client in Australia who sends me payments from his personal account to my Indian bank. I declare that as other income and pay taxes.
Now, I have a friend in Australia who can invest in the ASX (Australia Stock Exchange). I am willing to invest in ASX through her. This way, I save the exchange rates and fees when my client sends me money to India, and then send it back to Australia.
I am sure that many investors would earn and invest money abroad without getting the money into India in between. Now my doubts are:
- Since the money has yet to reach India, how should I declare it? Can I just declare it in that year and pay taxes? This would be a loss for me as I have yet to receive any money in India, but if this is the only way, then fine.
- The client sends the money to my friend. Can my Australian friend take my money and invest it on my behalf? I read that in Australia, they declare the income themselves, so she can declare that it is not her money and the profit from the stocks is not hers.
- Or should she pay taxes for my gains, and I rebate her taxes when I get my money back in India?
- I read in India that I can have a Power of Attorney to let my friend invest on my behalf.
- Since the money has yet to reach India, I will withdraw the amount after five years. Can I now declare the tax and profits, adjust my income, and do everything? But would it be right for me to declare the income after a few years?
So, I plan to earn the money from Australia and then invest it in Australia without getting it in India for no reason. I will withdraw the money after a few years, and I DO want to pay taxes legally.