Problems Being Faced by NRI's in Respect of Their Property in India

After purchase of immovable property they find either title of the property from whom they said is purchased is not clear or the property /land purchased is already mortgaged or given on lease to somebody else. As such, NRI's should make proper enquiry/ search revenue record either personally or through some reliable legal firm to know the status of the property before purchase.
Sometimes, NRI's find that the Seller was not authorized to sell the property purchased by them and the Seller has sold the property on the basis of fake Power of Attorney. NRI's should normally try to avoid purchase of property from Attorney Holders and if unavoidable, should make sure that the Power of Attorney is genuine and is properly registered and stamped by the Registration Authorities.
Some NRI's give their Agricultural Land on lease to their Relatives or Friends for cultivation in their absence but on return from foreign country they find it difficult to get back their land due to dishonesty of their Relatives or friends. NRI's should, therefore, given their Agricultural land on lease under proper Agreement duly drafted and vetted by some reputed legal firm/lawyer having adequate knowledge of Indian Revenue Laws and conversant with its Rules, regulations and procedures.
Similarly, NRI's also face problem in respect of Residential or Commercial Property given on Rent for non-payment of rent by tenants, undesirable changes or alterations made in the premises thereby undermining the utility of the premises and taking back the possessions of the said premises for their personal necessity/use. NRI's are, therefore, advised to give their residential or commercial premises on lease/ rent under proper agreement duly drafted by knowledgeable lawyer/legal firm. Periodical collection of rent /supervision by their legal attorney/lawyer shall help to mitigate this problem.
Some NRI's leave their properties uncared and on their return find that the same have been encroached/ taken possession of by somebody else. NRI's should, therefore, never leave their properties uncared /unattended. However, in case of such an eventuality, NRI's should immediately engage some good lawyer/legal firm and authorize him to take remedial steps /file civil/criminal cases against the encroacher as your lawyer may deem fit so as to take back the possession of the property.
Some NRI's give Power of Attorney or authorize their known persons to look after their property or collect rents in their absence and on return they find that their Power of Attorney has been improperly utilized by the Attorney Holder and their property has been transferred in somebody else's favor. As such, NRI's should normally avoid giving Power of Attorney and if unavoidable, get the same drafted from some good lawyer/legal firm.

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Why Families Should Not Put Household Employees on Their Business Payroll

As household employment specialists, we regularly have families come to us after attempting to put their nanny -- or other household employee -- on their company's payroll. While it may seem like an easy and logical way to handle a domestic worker's payroll, it typically results in expensive, time-consuming problems.

Business owners who have household workers need to keep their household and business payrolls separate.

The reason? Businesses are allowed to take tax deductions on their payroll expense. But the IRS requires that everyone on the payroll be a "direct contributor to the success of the business" and they've ruled that nannies and other domestic workers do not pass the direct contributor test. As a result, putting a household employee on the company books can result in the company taking an illegal tax deduction.

There are also employment tax filing issues. Generally, business enterprises are not allowed to include household employment activity on their business tax returns. The only business categories that are allowed to marry their household and business employment tax filings are Sole Proprietorships and For-Profit Farms. (Note: Even though they're given some latitude on the filing process, Sole Proprietorships and For-Profit Farms are still subject to the illegal tax deduction danger stated above).

Finally, there are issues with group benefit plans. We recently saw a case where a family put their nanny on the company health insurance plan. The nanny was later diagnosed with cancer and had medical bills in excess of $100,000. When the health insurance provider learned that she was a personal employee of the family, they denied the claim because she was not a direct contributor to the success of the company and, therefore, was not covered by the group policy. The company was forced to cover those medical expenses.

Instead of mixing business and personal payroll and tax filing processes, families with household employees should follow the household employment tax process, which has different foms, different processes and different deadlines (not to mention different labor laws in many cases). Reference IRS Publication 926. When handled properly, the family can take tax breaks on dependent care expenses through their personal income tax process.

The Bottom Line: Failing to keep the household and business payroll separate can result in the need to amend both corporate and personal tax returns and pay penalty and interest assessments. Additionally, it can expose the company assets if there's ever legal action from a disgruntled former household employee.

Tom Breedlove is a partner at Breedlove & Associates, the nation's leading provider of household employment payroll, tax and HR services. Since 1992, their comprehensive service has eliminated all the work, worry and risk for busy families across the U.S.

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