Home > Income Tax > Help Center > Moving? Last Updated: Aug 27th 2024
Moving? What to care when it comes to taxes?
Generally, change is prevalent in modern society. People can move from one state to another or from one country to another for a variety of reasons, including employment, the education of their offspring, etc. When relocating to a different jurisdiction, one must look into the tax implications.
Refer Who needs Income Tax Clearance Certificate (ITCC) ? For more information
The taxpayers need to check the below tax implications before relocating from one state to another state.
This document covers
- Change the Income Tax Jurisdiction
- Relocation Allowance
- Updating Address
- Open a bank account
- Selling a property
- Impact of GST
- Change of Tax Consultant
- Tax implications on moving from 1 country to another country
1. Change the Income Tax Jurisdiction
Generally, income tax jurisdiction will be with the address where the taxpayer has applied for PAN initially. But when the taxpayer is moving to another state, he need to apply for change of address in PAN which will result in change of jurisdiction.
2. Relocation Allowance
Check with your employer if you are relocating to another state for employment purposes to determine if you will receive a relocation allowance. If your employer provides a relocation allowance, certain expenses, such as packing and moving costs, initial housing costs, and travel expenses, will be exempt from tax if you can provide proof.
3. Updating Address
When you are relocating, update your new address in Income tax portal to ensure that you are receiving the communications from Income tax department on your new address.
4. Open a bank account
After relocation, open a new bank account with new address to ease your financial transactions as it might be difficult to visit old bank for any financial transactions.
5. Selling a property
If you are selling your own home due to relocation, you are required to pay capital gains tax or you need to plan reinvestment to avoid taxes.
6. Impact of GST
If you are businessperson or professional having GST in 1 state, you need to close the GST and apply for new GST in relocating state.
7. Change of Tax Consultant
Generally it is not required to change the consultant as the companies like EZTax are providing services on Pan-India basis. But if you want to change the consultant due to distance etc, you can check for the options.
What Else?
Even though changing the following identities has no tax implications, it is always a good idea to do so when relocating your permanent residence.
- Voter ID
- Ration Card
- Address in Aadhar
- Driving Licence
- Gas card
- Passport Address
- Mutual Funds, Demat Account, Provident Fund, Insurance or any other investments made
- Communicate the address to the employer
8. Tax implications when moving abroad?
Moving from one country to another is a vast topic with numerous tax implications, including change of residential status, investments in India, and capital gains tax, among others.
Refer NRI Tax Help Center for more information on the tax residency status and various other topics