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DTC TREATS NRIs AS ‘NOT REQUIRED INDIANS’
Posted by
mukesh patel in
Direct Tax Code, Tax Clues - Ahmedabad Mirror on
Oct 25th, 2010 |
no responses
Harsh Taxing Provisions & Tinkering with Residential Status
under the Code are bound to irk the Global Indian Community!
Amrish Amin, a Non Resident Indian (NRI) settled in U.K. earns interest income of Rs.3 lakhs on his Non Resident Ordinary (NRO) Account Bank Deposit in India in the current FY 2010-11. Enjoying his personal exemption limit of Rs.1,60,000 and the eligible deduction of Rs.1,00,000 under Section 80C, Amin is comfortable paying income-tax of Rs.4,000 in the first slab of 10% on his effective taxable income of Rs.40,000.
A huge shock awaits Amin and some millions of NRIs, in regard to taxation of their interest and income from non-Equity Oriented Funds earned in India, proposed to be treated under the draft Direct Tax Code as ‘income from special sources.’
In 2012-13, on the same interest income of Rs.3 lakhs, Amin will be required to pay a hefty tax of Rs.60,000 at the flat rate of 20%, without being eligible to claim any basic exemption or other deduction, as provided under Part III of the First Schedule to the Code.
