NRIs can cheer about the increase in the threshold limits and liberalisation of the tax slabs. The new tax slabs will result in tax saving of around Rs 45,000 for individuals having an income of more than Rs 5 lakh. Also individuals will now not have to pay any tax on income up to Rs 1.5 lakh

An additional tax deduction of Rs 15,000 is also proposed for medical insurance cover for parents.

NRIs will continue to enjoy exemption on the long-term capital gains on which securities transaction tax (STT) has been paid.

Further, NRIs have the option of offering their investment income and long-term capital gains income arising from specified assets to tax at beneficial rates - 20% for investment income and 10% for long-term capital gains.

However, the benefit of indexation or deductions under Chapter VI-A are not allowed in computing such income.

Further, where appropriate taxes have been deducted at source from these incomes, there is no requirement to file a tax return.

At present, NRIs are also allowed to maintain foreign currency (FCNR) accounts & NRE accounts in India to invest in non-resident (non-repatriable) rupee deposits and also in RBI-approved foreign currency deposits with scheduled banks and claim tax exemption on income arising there from.

These provisions remain unchanged. Further, NRIs can freely repatriate, outside India, their earnings in the form of interest, rent and dividend received in India, without any additional tax burden subject to specific conditions.

The introduction of Foreign Currency Exchangeable Bond (FCEB) may also provide the NRIs with another avenue of investing in India.

The Budget provisions specifically exempt conversion of such bonds into shares from capital gains tax.

Copyright © 2006- 2015 NRIRealtyNews.com

• Disclaimer
• Contact Us