Legal & income Tax


No tax liability will arise in India on notional gains arising on appreciation in investment till it is crystallised on withdrawal. The tax patterns will be similar to the US practice mentioned by you.
This can be avoided by getting a certificate from the tax officer on the exact amount of tax liability on the redemption of units, for which an application be made either by the recipient or the Mutual Fund.
Receipt of such money from a friend will be taxable as income under a special provision that taxes all receipts other than from 'relatives' as income if the amount exceeds INR 25,000 in a year. Transfer money to parents will not pose any tax problem and this can be done by wire transfer or through special money transfer intermediaries, like Indian Post Office.
Unlikely, since the provision applies only if the person leaves India in pursuance of an employment. If the employment was fixed only for 5 months to start with, this won't be possible.
Since you are an NRI income earned in India is taxable in India and a return of income, as an NRI has to be filed in India. The salary earned outside India is not taxable here since you are an NRI.
If the proceeds of the sale of land is invested in specified bonds like National Highway Authority bonds, rural electrifications bonds etc capital gains on the sale is exempt under section 54EC of the Income tax Act. There of course conditions like holding period for the bonds, which are specified.
Agricultural land situated beyond certain limits will also qualify for the capital gains exemption. To calculate the capital gains the original cost is taken as the basis. Indexation will apply taking the value as at 1.4.81 and indexing the value from thereon. The capital gains need to be reinvested in the bonds to qualify for the exemption and not the entire proceeds.
Investments will be possible subject to existing limits in different companies. Debt investment is also possible. Tax on dividend is exempt in India for the shareholders. However, specific tax advice will be necessary as the quantum of investment is quite significant.