Place Of NRIs As Per The Taxation Norms
An Indian citizen or a person of Indian origin, who is not a resident as defined above, is called an NRI (Non-Resident Indian) for the purpose of taxation. One can avail of share market tips at 24cfin to elaborately know about the taxation norms.
NRIs have the option of being covered by the special provisions of chapter XII A of the Income Tax Act, for investment income earned on assets. Interest earned on NRE accounts, FCNR and RFC deposits are exempt from tax. Any investment income from specified assets is taxed at the rate of 20% and long-term capital gains at the rate of 10%. Specified assets include shares, debentures, government securities, deposits and other notified assets acquired out of foreign exchange. The NRI will not have the benefit of deduction under chapter VIA or benefit of cost indexation for capital gains, if they chose to use the concessions of this chapter. They do not have to file income tax return if the income covered under this head is the only income for the year and tax has been deducted at source.
NRIs can choose not to be governed by the provisions of unit XII A. They have to give a declaration to this effect, along with the return of income. In this case, they will be assessed under the normal provisions of the Act. They will, however not be allowed deductions under Section 80. They also will not be eligible for indexation benefits. However, Capital gains exemption for investing in specific assets is available to them.
The special provisions applicable for NRI investors may continue to be available even after an NRI becomes a resident, for specified assets, financed by convertible foreign currency.
24 Carat Financial Services provides free commodity trading tips with high accuracy and precision.
NRIs have the option of being covered by the special provisions of chapter XII A of the Income Tax Act, for investment income earned on assets. Interest earned on NRE accounts, FCNR and RFC deposits are exempt from tax. Any investment income from specified assets is taxed at the rate of 20% and long-term capital gains at the rate of 10%. Specified assets include shares, debentures, government securities, deposits and other notified assets acquired out of foreign exchange. The NRI will not have the benefit of deduction under chapter VIA or benefit of cost indexation for capital gains, if they chose to use the concessions of this chapter. They do not have to file income tax return if the income covered under this head is the only income for the year and tax has been deducted at source.
NRIs can choose not to be governed by the provisions of unit XII A. They have to give a declaration to this effect, along with the return of income. In this case, they will be assessed under the normal provisions of the Act. They will, however not be allowed deductions under Section 80. They also will not be eligible for indexation benefits. However, Capital gains exemption for investing in specific assets is available to them.
The special provisions applicable for NRI investors may continue to be available even after an NRI becomes a resident, for specified assets, financed by convertible foreign currency.
24 Carat Financial Services provides free commodity trading tips with high accuracy and precision.
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