No, this is not possible at the current juncture. The nearest solution is to take advantage of the concession of giving a casual gift of up to US$ 1,000 per calendar year. In case the daughter is dependent upon the father, US$ 5,000 is permitted for the maintenance of a close relative permanently residing abroad per calendar year per beneficiary by a family unit.

1. How can I get maximum tax benefits out of housing loan installments paid and the interest paid on such loans?
2. Can I take a loan from my bank against my own deposits/other securities for the purpose of acquiring a house and avail of these tax benefits?
--Jaypatel100@yahoo.com

1. If the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the interest payable is deductible. The word used is `payable' and not `paid'. Therefore, if the finance company collects the loan first and interest later, the borrower can claim the rebate u/s 88 on a larger amount and also claim deduction of interest u/s 24 on an accrual basis.

Payments towards the cost of construction or acquisition of a residential house qualify for rebate u/s 88 with a ceiling of Rs 10,000 (raised to Rs 20,000 by FA00), provided such payments are installments or part payments of loans from approved sources.

2. If the loan is taken for the acquisition of a housing property, you are eligible to claim the related deduction and rebate. It does not matter whether the security is your own bank deposit or someone else's.

I am an Indian citizen recently came to Canada to work. I am considering taking up Canadian citizenship. I have substantial assets in India, as property, bank deposits, mutual funds and equities as well as a steady income from properties on lease in India. I would like to know whether the assets will still be mine if I take a Canadian citizenship after staying here for 3-5 years. I know that capital account convertibility is still not there; besides I would not like to liquidate my assets back home, and use a part of it in Canada.
--Chrys, TORONTO

At the present juncture, you are an NRI and after you change your nationality, you will get the status of a PIO (Person of Indian Origin). There is hardly any difference between the two in terms of rights and obligations.

Of course, your Indian assets will always belong to you. However, at the present juncture, you cannot take any part of it abroad. Nonetheless, if you approach the RBI for specific permission, with a specific purpose in mind, you may be allowed to do so.

However, I have some good news for you. ADMA Circular 18 has taken a giant leap forward on repatriability of Indian assets in the process of liberalisation. The following is the gist:

"At present, NRIs have been permitted to make investment in partnership and proprietorship concerns, shares and debentures of Indian companies, units of UTI/MFs, deposits with Indian companies, deposits with banks, real estate, etc., on a non-repatriation basis. The investments/deposits held in India by Indian employment/emigration, as well as income/ interest earned on such investment/deposits is currently not allowed to be repatriated abroad. It has since been decided that income/interest on investment/deposits will now be allowed to be repatriated."

Of course, it is necessary to pay tax in India on this Indian income. CBDT Circular No. 759 dated November 18, 1997, allows such remittances of the interest income if the person making the remittance furnishes an undertaking (in duplicate) addressed to his ITO accompanied by a certificate from an accountant (other than an employee) as per the prescribed form.

Is it compulsory to open an RFC account within three months? What happens if I do not open an RFC account, and my Resurgent India Bonds become due on maturity? I am a resident (RNOR) in India. Can I then open a RFC account with, say, ICICI Bank, and ask SBI to credit the proceeds to that account? What are the alternatives available on maturity for holdings in foreign currency? One of the conditions at the time of issue of RIBs was that if the holder became a resident, the maturity proceeds would be credited to an RFC account!
--Girish, DUBAI

It is not compulsory for each and every returning Indian to open an RFC account. This account was (note the past tense) useful for availability of foreign exchange to the account holder. Now, the exchange is liberally made available to residents whenever needed. Since the interest on RFC accounts is low and since tax is deducted at source @ 33 per cent on this interest, I strongly feel that RFC has now become an useless utility even though it is tax-free in the hands of RNORs. Read FAQ04 for details.

Yes, it is possible for you to credit the proceeds of RIBs to your RFC account, if you have such an account.