Friends,
Income Tax Act , under the Chapter XIIA provides some special provisions which grants reliefs to Non Resident Indians or Person of Indian Origin. The provisions are contained in section 115C to 115 I .The special relief is regarding special tax rates for two types of income-investment income and income from long term capital gains- of a Non Resident Indian.
Investment income
Investment income is defined in section 115C to mean that any income generated from following specified assets :
(i) shares in an Indian company;
(ii) debentures issued by an Indian company which is not a private company
(iii) deposits with an Indian company which is not a private company
(iv) any security of the Central Government as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);
(v) such other assets as the Central Government may specify in this
Long term capital gains.
Long term gains are long term gains on any assets as stated in aforesaid “specified asset{i to v} . So do not confuse with all types of long term capital gains. In simple terms it means any of the assets , stated in [i to v] ] purchased in foreign exchange can only qualify for the special treatments.
Special Rates
The provision under section 115E provides rates as under
1. on investment income on specified assets @ 20%
2. on long term gains on specified assets @ 10 %
3. on long term gains on all other types assets @ 20 %
Am I compulsorily assessed under these provisions?
Investment income
Investment income is defined in section 115C to mean that any income generated from following specified assets :
(i) shares in an Indian company;
(ii) debentures issued by an Indian company which is not a private company
(iii) deposits with an Indian company which is not a private company
(iv) any security of the Central Government as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);
(v) such other assets as the Central Government may specify in this
Long term capital gains.
Long term gains are long term gains on any assets as stated in aforesaid “specified asset{i to v} . So do not confuse with all types of long term capital gains. In simple terms it means any of the assets , stated in [i to v] ] purchased in foreign exchange can only qualify for the special treatments.
Special Rates
The provision under section 115E provides rates as under
1. on investment income on specified assets @ 20%
2. on long term gains on specified assets @ 10 %
3. on long term gains on all other types assets @ 20 %
Am I compulsorily assessed under these provisions?
No , these provisions are applied if the Non Resident Indian has not opted out of these provisions. That is , when you are filing return of income, you must state that chapter XIIA should not be applied in your case. If you have not stated any thing, it means that this chapter will apply on every Non Resident for income as stated above.
I am Person Of Indian Origin. Will I be Covered under these provisions?
As per section 115C , clause (e) “non-resident Indian means an individual, being a citizen of India or a person of Indian origin who is not a resident.” Also note that Explanation to section 115C states “A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India;”.Therefore ,A person of Indian origin is defined as Non Resident Indian for the Chapter XIIA of the I T Act.
Can I avail of the benefit if I become resident?
yes, section 115H provides that if a non resident Indian has invested in foreign exchange in specified assets [as listed above in i to v] and subsequently becomes resident of India, he can give in writing toi the assessing officer that Chapter XXA shall continue to apply to him.
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I am Person Of Indian Origin. Will I be Covered under these provisions?
As per section 115C , clause (e) “non-resident Indian means an individual, being a citizen of India or a person of Indian origin who is not a resident.” Also note that Explanation to section 115C states “A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India;”.Therefore ,A person of Indian origin is defined as Non Resident Indian for the Chapter XIIA of the I T Act.
Can I avail of the benefit if I become resident?
yes, section 115H provides that if a non resident Indian has invested in foreign exchange in specified assets [as listed above in i to v] and subsequently becomes resident of India, he can give in writing toi the assessing officer that Chapter XXA shall continue to apply to him.
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