Incase if you are not aware of the latest news for NRI’s—Tax structure if you are having Investment/savings – earnings etc etc in India.. Pls do pass it on ----------
Regards Kaushik Pandya Im Grund 10 A 40474 Duesseldorf.Germany Tel: + 49 (0) 211 288880 Off: + 49 ( 0) 211 9293314 * * * NOT REQUIRED INDIANS* *NRIs treated as Not Required Indians* *Indubhai Amin, a non-resident Indian (NRI) settled in the UK earns* *interest income of Rs 3 lakh on his non-resident ordinary account bank* *deposit in India in the current FY 2009-10. Enjoying his personal* *exemption limit of Rs 1.60 lakh and the eligible deduction of Rs 1* *lakh u/s 80C, Amin is comfortable paying income tax of Rs 4,000 in the* *first slab of 10 per cent on his effective taxable income of Rs* *40,000.Flat tax of 20% and 30%* * * *A huge shock awaits Amin and millions of NRIs, in regard to taxation* *of their interest and investment income and capital gains earned in* *India, proposed to be treated under the draft Direct Tax Code as* *"income from special sources."* * * *In 2011-12, on the same interest income of Rs 3 lakh, Amin will be* *required to pay a hefty tax of Rs 60,000 at the flat rate of 20 per* *cent, without being eligible to claim any basic exemption or other* *deduction, as provided under rule three of the First Schedule to the* *Code.* * * *Moreover, all capital gains earned by a non-resident will attract a* *flat tax of 30 per cent, irrespective of the amount of capital gains.* *While a resident Indian will be required to pay tax of Rs 3.84 lakh on* *his taxable income of Rs 25 lakh, an NRI earning equivalent capital* *gains will be called upon to pay almost double tax of Rs 7.5 lakh.* * * *Hair-raising drafting* * * *New section 13 (2) provides that such ‘special income’ shall be* *computed in accordance with the provisions of the Ninth Schedule, the* *drafting of which is literally hair-raising. It provides that the* *amount of accrual or receipt shall be computed as the taxable income,* *and no loss, allowance or deduction shall be allowed, as the same* *shall be presumed to have been granted. The only exception in this* *regard, in respect of capital gains arising from the transfer of* *equity shares or units of equity oriented mutual fund chargeable to* *STT, is quite amusing, as it stands redundant in view of the proposal* *to abolish STT (a classic instance of incoherent drafting).* * * *The draftsman does not seem to have realized the harsh implications.* *It means that if an NRI sells a capital asset purchased for Rs 10 lakh* *at Rs 30 lakh, he will be required to pay tax of Rs 9 lakh at 30 per* *cent on the gross sale consideration of Rs 30 lakh without any* *deduction even for the cost of acquisition of Rs 10 lakh (not to* *mention any benefit of indexation on the same).* * * *Determination of residential status* * * *The residential status of an individual under the Code is proposed to* *be determined as per the current norms. However, the status of "not* *ordinarily resident" (NOR) is proposed to be eliminated. Despite the* *above, Clause 24 of the Sixth Schedule has still provided for* *exemption in respect of interest earned on foreign currency deposits* *in the case of NOR. Poor drafting indeed!* * * *The Code has proposed to retain the current exemptions availed by a* *non-resident in case of interest earned on NRE and FCNR deposits with* *banks.* * * *Special exemption for returning NRIs* * * *A useful exemption has been provided in case of income earned outside* *India, if it is not derived from a business controlled from India, in* *the financial year in which the returning NRI becomes an Indian* *resident and the immediately succeeding financial year. However, the* *benefit of the said exemption would be available, only if such* *individual was a non-resident for nine years immediately preceding the* *financial year in which he becomes a resident.* * * *Wealth-tax liability for NRIs* * * *Proposed Section 102 of the Code provides for wealth tax liability in* *the case of the value of all global assets of an individual or HUF.* *However, an exemption has been provided in case of the value of assets* *located outside India in case of an individual who is not a citizen of* *India or an individual or HUF not resident in India. Hence, while* *returning NRIs who are non-citizens will enjoy wealth-tax exemption* *for their overseas assets, NRIs with Indian citizenship becoming* *residents will attract wealth-tax liability on such assets held* *abroad.* * * *Illogical exemption under wealth-tax* * * *Talking about wealth tax, the Code prescribes an exemption in respect* *of any house or plot of land belonging to an individual or HUF, if it* *is acquired before April 1, 2000. It is difficult to understand the* *logic as to why this exemption has been denied in all cases where such* *immovable property is acquired after March 31, 2000!* * * *Proposals That Will Hurt the Global Indian Sentiment* * * *Flat Rate of Tax* * * *20% flat tax on interest & other investment income* *30% flat tax on all capital gains* *Apart from 20% & 30% TDS on above, TDS at a baffling rate of 35%* *prescribed on all residual income.No Personal Exemption* * * *No personal exemption or deduction allowed in computing the above* *income treated as ‘income from special sources’.* *Weird Interpretation* * * *Poor drafting leads to such a weird interpretation that transfer of a* *capital asset may attract 30% tax on gross sale consideration.* * * *What Discrimination!* * * *Ironical but true! Non-Indian sportspersons, say Ricky Ponting or* *Shoaib Akhtar, required to pay a concessional tax of 10% on their* *game, advertisement and column earnings in India, thus enjoying a more* *privileged tax status than our own sons of the soil living abroad.* * * *PLEASE PASS ON THIS INFORMATION TO ALL THE INDIANS WHOM YOU KNOW !!!!!!!!!* --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
