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non-resident Indians to file income tax return

Due date to file Income tax returns for non-resident Indians – 31st July

Definitions for the purpose of this article

  1. Investment Income – means any income derived other than dividends referred to in Section 115-O from any of the Specified Asset (acquired or purchased with, or subscribed to in, convertible foreign exchange)
  2. Long Term capital Gains – Long term capital Gains relating to Specified Asset (acquired or purchased with, or subscribed to in, convertible foreign exchange)
  3. Specified Asset means any of the following namely
  4. Shares in an Indian Company
  5. Debentures by an Indian company which is not a private company
  6. Deposits with an Indian company which is not a private company
  7. Any security of the Central Government as defined in clause (2) of section 2 of The Public debt Act, 1944
  8. Other such assets as the central government may specify in this behalf by notification in the official gazette

Special Provisions

  1. Chapter VIA and Indexation benefits are not allowed against Investment income and Long-term Capital Gains

Tax Rate

  1. Long term capital gains will be taxed as 10%
  2. Investment Income – 20%
  3. Education cess and surcharge as applicable
  4. Any other income will be taxed at normal rates

Exemptions from Capital Gains

  • Net sale proceeds to be utilized within 6 months for the purchase of another specified asset or saving certificate referred to in section 10(4B)
  • If the cost of New asset is greater than Net sale proceeds than entire capital gains is exempt from tax
  • If the cost of new asset is less than Net sale proceeds than capital gains is exempt in the proportion of Cost of New asset to the Net sale consideration

[ Capital Gains Exempt = Capital Gains x Cost of new asset / Net sale proceeds]

  • If the new asset is sold within 3 years of acquisition, Long term capital gains will be taxed in the year of sale

Benefits under the chapter to be available in certain cases even after the assesses becomes a resident

Where a person, who is a non-resident Indian in any previous year, becomes resident in India in respect of the total income of any subsequent year, he may furnish to the assessing officer in writing along with the return of income for the year which he is so assessable so that the provisions of this chapter shall apply to him in relation to investment income derived from any foreign exchange asset and the provisions of these sections shall continue to apply to him for that assessment year as well as all other subsequent assessment years in relation to such investment income till the time such assets are transferred or converted into money

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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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