Letters for registration at FRRO Mumbai

As I said in my previous post, here I give you the links for downloading the templates of letters for registration at FRRO Mumbai. I hope somebody finds them useful:

Request letter for registration at FRRO Mumbai:

http://www.ecam.co.in/EntrepreneurBlog/RequestLetter_Template_FRRO_Mumbai.doc

Undertaking letter for registration at FRRO Mumbai (as per format given to me a couple of days ago):

http://www.ecam.co.in/EntrepreneurBlog/UndertakingLetter_Template_FRRO_Mumbai.doc

They may change one day, but at least for the time being these should work well and you may not need to go more than once if you have everything prepared.

By the way, I forgot to say in my previous post, you need to bring three sets (i.e. two extra copies) of all the papers.

Registration at FRRO

This may not be very useful for most entrepreneurs in Mumbai, but it is part of my life as an Entrepreneur here because of not being an Indian citizen. Besides, I think it can be useful to many other people.

Part of the information that I am going to give here can be found at http://www.immigrationindia.nic.in/

Every person living in India with a visa which lasts for more than 180 days needs to register at the Foreign Regional Registration Office or FRRO. FRRO Mumbai is located very near VT and behind St. Xavier’s college. The exact contact details are:

Telephone No.: 022-22620446 (O) 022-22620721 (Fax)

E-Mail Address:  frromum@nic.in  dcpsb2.frro@indiatimes.com 

Address: 3rd Floor, Special Branch Bldg., Badruddin Tayabji Lane,
Behind St. Xaviers College, Mumbai-400001.

This registration must be done within 14 days from landing in India and must be done at the city where you have your residence.

They often change the papers required, just as it happened this month, and this is what inspired me to write this post in the blog so that those registering can have the latest information. The site http://www.immigrationindia.nic.in/ gives some information in the “Registration Req” link, but is not updated and they don’t give you any templates there which they do give when you are there. Currently, the documents required for Employment Visa are:

• 4 recent passport size photographs;
• Photocopy of photo page and valid Indian Visa page of the passport;
• Proof of residential address in India;
• Request letter
• Undertaking letter
• Contract agreement from employer

The undertaking letter is what has changed recently. Before they had a very small format which was required, later on they added the requirement of an Indian person signing the letter (and you must accompany the letter with an identity proof of that person, such as passport copy), and now they are giving a new template for the letter which must be printed in the Company’s letter head. I will be uploading that template in a future post.

The request letter is for the company to request the registration of its employee. It should mention the passport number and address of the foreigner. I like to include other information as well, just in case, such as visa number and nationality. I will also upload that in the same post as the other.

Make sure you know where the time period of the contract agreement is specified in the document and where are the details regarding salary as this is what they look for and you could save them some valuable seconds by finding it for them.

People wanting to register who have other types of visa, such as student visa, need other documents such bonafide certificates from their institute. I guess they won’t need a contract agreement, but I assume that they also need the undertaking and request letters.

TDS on salary

Calculating the TDS to be deducted from an employee receiving monthly salary could be a little more complicated than doing it for external professional services.

First, it is required to forecast what will be the total gross income of an employee during the whole year. This calculation should include the earning he or she may have got from a previos employeer if the recruitment has been done in the middle of the financial year.

Then, you will need to calculate the liability of tax payment based on the income. For example, a person earning from 1.5 lakhs to 3 lakhs is liable to 10% tax on the amount above the first 1.5 lakhs. Subsequently, there are other slabs at different rates which every year may vary therbexact figures. Thus, it is important to check those slabs while calculating.

Once you know the total tax liability, then you should divide that amount by the nuber of months remaining in the financial year (12 if it is the beginning of the year) and deduct that amount every month.

Remember to file the TDS payments every quarter before the 15th of next month!

Education cess to be removed from TDS payments

Until now, whenever you made a deduction at source for tax (TDS) you also had to deduct an additional percentage which would be destined directly for education budget in India.

This extra percentage would somehow complicate calculations by producing odd figures. For example, the TDS for professional services is 10% plus a 3% for education cess on that, which would take it to a total figure of 10.3%. It doesn't sound like a big deal, but in fact it makes calculations and filling up of forms more tedious than they should be, as you have to specify them separately.

I have been told that the education cess figure will be removed from the payments on 1 October 2009 onwards. Thus now it will be only the 10% in the case of professional services, which makes it quite easy for the fomalities.

I understand this will not apply to all TDS concepts, but I will get to know more details only once we are closer to October 1.

TDS Calculation for professionals abroad

After a few hours at the C.A.'s office today, dicussing this and various issues, I have clarified the following with respect to tax deduction at source (TDS) for payments to professionals outside India.

As I said in my previous post, the TDS should be calculated depending on the country to which the money will go. The percentage will vary from country to country based on the treatise India may have with them.

However, those payees which do not carry out their service in India and will not do it throughout the financial year are excempted from this TDS. That means that, if the payee will not come to India to carry out its service, and always does it remotely, you will not need to deduct any tax and you can make the payment in full.