Do I need to pay tax on the amount of savings I have in the bank?
In India, assuming that you have already paid relevant [Income/Capital gains] tax and then deposited the funds into your Bank [Savings or Current] Account; there is NO INCOME tax payable for amount.   Any interest earned on this amount is taxable as per Income Tax rules and would be taxed at your income slabs.   Wealth Tax is exempt from funds in your Savings Account. I am not sure about the funds into Current Account of individual, beyond a limit they may get counted and become part of Wealth Tax. More details here http://timesofindia.indiatimes.com/business/personal-finance/Do-you-have-to-pay-wealth-tax/articleshow/21444111.cms Not for the amount in the accounts but for the interest you earn per year is taxable. But the sum of your all taxable incomes is under the limit, then you dont need to pay any income tax. The limit is available at wiki here But you should intimate your bank not to deduct TDS (Tax Deducted at Source) by submitting Form 15G/15H (which will be normally available in Bank itself), provided your total interest income for the year will not fall within overall taxable limits. You may calculate your income tax amount at Official website at here
You can receive money directly into your savings bank account. It is perfectly legal. FYI the Bank as part of regulation would report this to RBI. As the funds are received for the services you have rendered, You are liable to pay tax on the income. The income is taxed as professional income similar to the income of Doctors, Lawyers, Accountants etc. If you are paying your colleagues, it would be treated as expense. Not only this, you can also treat any phone calls you make, or equipment your purchase [laptop, desk etc] as expense. The difference become your actual income and you would be taxed as per the rate for individuals. It's advisable you contact an accountant who would advise you better for a nominal fee [few thousand rupees] and help you pay the tax and file the returns. With or without accountant It is very important for you to record all payments and expenses in a book of accounts. If you are planning this as a tax avoidance scheme, well it is not. The gains will be taxable in your hands and not in the Banks hands. Banks simply don't cash out the stock at the same price, there will be quite a bit of both Lawyers and others ... so in the end you will end up paying more. The link indicates that one would pay back the loan via one's own earnings. So if you have a stock worth USD 100, you can pledge this to a Bank and get a max loan of USD 50 [there are regulations that govern the max you can get against 100]. You want to buy something worth USD 50. Option1: Sell half the stock, get USD 50, pay the captial gains tax on USD 50. Option2: Pledge the USD 100 stock to bank, get a loan of USD 50. As you have not sold anything, there is no tax. Over a period pay the USD 50 loan via your own earnings. A high valued customer may be able to get away with a very low rate of intrest and very long repayment period.   The tax implication to your legal hier would be from the time the stock come to his/her hands to the time she sold. So if the price increase to 150 by the time Mark dies, and its sold at 160 later, the gain is only of USD 10. So rather than paying 30% or whatever the applicable tax rate, it would be wise to pay an interest of few percentages. No you will not be taxed for the money in account 2. You have already paid for the tax on the money saved. There is no interest earned on the amount and hence it is not taxed. In UK the interest on ISA [Individual Savings Account] is not taxable as well. Hence you may even transfer the money to account 2 that is an ISA and not a current account. "Nothing stops you doing that, but there's no gain to be had by doing it. ""Removing it from being a tax liability"" isn't a single event that happens when you put money in an ISA. The money that actually goes into the ISA is post-tax income, not pre-tax income.  The benefit you get is that as long as you leave your money in the ISA, you don't pay tax on interest or capital gains within the ISA. If you liquidate an ISA immediately after creation, you won't get any such interest and therefore no tax benefit." If you are a US resident (not necessarily citizen) then yes, you do have to pay capital gains taxes on any capital gains, including interest from assets oversees (like interest from a savings account). Additionally you have to report all your foreign bank accounts according to FATCA (https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca). Interest earned over my saving only As you are Tax resident in UK, UK taxes Global income. So the interest earned in India is taxable. Further this is taxable when the interest was paid to you in India and it is not relevant whether you kept the funds in India or repatriated to UK.  It is not clear in your question as to when the interest was credited to your Indian account. If its been for few years, you are in breach of the UK tax regulation. Consult a tax advisor how this can be corrected. If it is for this year, pay taxes as per normal tax brackets. But is the money saved taxable? Not sure I understand the Question. If say you have salary of Rs 5 Lacs, after paying taxes and expenses, lets say you save Rs 1 lacs. If you keep this 1 lacs in savings account. You will get interest. If this interest is less than Rs 10,000/- it is not taxable. If it is more that Rs 10,000 then the additional amount is taxable. i.e. if you get a savings bank interest of Rs 15,000/- the difference Rs 15,000 minus Rs 10,000; i.e. Rs 5000 is taxable. Note if you keep the 1 lacs in Fixed Deposits, then all interest even if you get Rs 1 is taxable. Edit: If you invest the Rs 1 lacs in Tax Saving FD [lock-in period of 6 years], then Yes. You can claim deduction under section 80C. "For the financial year 1 April 2014 to 31 March 2015, as you have [or will be] spent more than 182 days outside India, you would be treated as ""Non-Resident"" [NRI] for tax purposes.  If you are NRI  Show my Kuwaiti Income in my Income Tax Return?   Pay any tax on the money that I am sending to savings bank accounts in India You need not Pay Tax on your income outside India. i.e. there is no tax obligation created. It cannot be declared in Tax Returns. However any interest you earn on the money deposited in India would be subject to taxes. Will my wife have to show the income and/or pay the income tax on the money that I am sending to her savings bank accounts? There is no Income to you wife [Income is something you earn] and hence its out of scope from Income Tax act. It would fall under gift tax rules. As per Gift Tax one can transfer unlimited funds between close relatives. Hence there is No tax. It would be better if you open an NRO/NRE account and transfer funds into that account" "The number one rule of thumb that will generally answer the ""is it taxable"" question for any money you may have or receive: ""Did you pay taxes on it already?"". Pretty much any money you actually get in your paycheck/DD has already been taxed (or at least the projected amount of tax has been withheld) is your money, to dispense with as you will (or according to your pre-arranged obligations, for most of it). Deposits paid are one such example; if you wrote a check or obtained a money order that they then cashed, that's still your money until it isn't; the contract states that it is being held effectively in escrow (though the landlord has free use of it so long as he can pony up according to the contract). Anything not used to pay for damages is yours, and you get it back. The ATM fee refund is trickier, but basically this is a benefit offered to you as a service by your bank. You front for the ATM fees incurred when withdrawing, and then those fees are refunded to you by your bank (effectively increasing the number of ATMs you can withdraw from ""for free""). As long as there is no net income, it's treated like a mail-in rebate; you didn't gain any money, so there's nothing new to tax. There are a couple of specific exceptions to this otherwise overarching rule of thumb. One is Roth IRAs. Typically, on investments, you either pay income tax on the money going in and capital gains tax on the money coming out, or you pay nothing going in and income tax coming out. With a Roth, however, you pay income tax going in and nothing coming out, even though you're (eventually) getting back more than you put in.  Another is gifts. Whoever gave you the gift paid the taxes on it (or the money to buy it). However, if they give you a gift valued more than a certain limit (changes every year, and there's a lifetime limit), they have to pay an additional gift tax of 35% on any amount over the limit. That's taxing taxed income (usually).  There are other examples, but for the overwhelming majority of situations, if it's money you already had after any and all applicable taxes, it's not taxable even if you haven't seen that money for a while." "DirectGov has a good overview here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017814 and answers to your specific questions here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435 In short, you do need to declare the rental income on your tax return and will need to pay tax on it (and note that only the mortgage interest (not the full repayment) is deductible as an ""allowable expense"", see the full list of what is deductible here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10014027 )." In the general case if you have income coming in from a foreign source you need to declare it on your Canadian tax form, and nominally pay tax on it. However Canada has a tax agreement with the UK to ensure that you are not taxed twice. You also declare how much tax you have paid to the UK, and that is deducted from your Canadian tax bill. You may need to consult a tax professional, or maybe just read the Revenue Canada website to get the details. If you are holding this money for a friend, then you may find that this does not count as income to you. If you are getting it transferred to you in Canada, and then immediately passed on to your friend, it probably doesn't count as income (though again a tax professional will probably be helpful). This would mean you don't have to pay Canadian tax. But it's also a bummer because you've paid UK tax, which you might also have avoided, and you can't get that back without a lot of form filling. If this is going to be an ongoing situation, and the amount is significant, then you might look at getting your friend's money (and any you have in a UK account yourself) transferred to an offshore account, where UK tax is not automatically deducted. Most UK banks will do this for non-UK residents. I know that if you make more, you pay more, but do those who have   more, not make more, pay higher income tax? In general, no. In most locales, income tax is based on income, not on wealth. I am retired. I have little income but a fair amount of wealth. I play very little income tax. (But I do pay other kinds of taxes.) Here's a scenario. 2 people of average wealth with similar situations   have the same job with equal pay. After 5 years, their situations   haven't changed and they still earn equal pay, but now one has $40,000   in their account and the other $9,000. Does one now pay higher income   tax because he has more in his account or does he pay the same because   he makes the same? In most locales, you pay income tax on everything that is counted as income. Your salary is income. In some cases, earned interest is income.  But aside from the earned interest from your bank accounts, neither the $40,000 nor the $9,000 is income. Your huge mansion isn't income. Your expensive car isn't income. The huge amount of land you own isn't income. The pricey artwork on your walls isn't income. You don't pay income tax on any of these, but your local may impose other taxes on these (such as property tax, etc.) [Note: consult the tax laws of your specific locale if you want to know details.] The money in the checking account was already taxed. It was income this year or last, or a gift from somebody, or earned interest that will be taxed. If it was a deductible IRA you would declare it next April and get a refund from the government. "I think the key point that's making the other commenters misunderstand each other here is the concept of ""deductions"". I can only speak for the UK, but that's only a concept that business owners would understand in this country.  For things like child credits or low income tax credits, we don't get paid them at the end of the tax year, but into our bank accounts every couple of weeks all year round. Therefore, we have nothing to ""deduct"". If we work for a company and have business expenses, then the company pays for them. If we make interest on our savings, the bank pays it for us. We make money at our jobs, and the employer works out what taxes and national insurance we owe, based on a tax code that the government works out for us annually (which we can challenge).  To be fair, it's not like we're free from bureaucracy if we want to claim these benefits. There are often lots of forms if you want child benefit or disability allowances, for instance. We just apply as soon as we're eligible, rather than waiting to get a lump sum rebate. So it appears to be a very different system, and neither is inherently better than the other (though I'm personally glad I don't usually have to fill in a big tax return myself, which I only did one year when I was self employed). I'd be interested to know, since Google has let me down, which countries use the American system, and which the British or Czech." If you hold this money in USD and spend it in the US as USD, then there is no tax liability or reporting requirement at all.  You are not subject to any tax on foreign exchange gains and losses because you have not performed any foreign exchange.  CRA says a foreign exchange gain or loss happens when the fx transaction occurs—not as the currency’s value fluctuates while on deposit - and since you are never performing an fx transaction, no such issues will arise.  The CRA is not interested in how you spend your money, only the money that you earn.   The only possible tax liability that would arise in the circumstances that you describe would be the tax liability arising from interest earned while the cash in on deposit.  If this interest exceeds the threshold of reportability, then your bank will issue you with a T-slip to be included in your tax return.