|Resident & ordinarily Resident
- would income taxable.
Resident but not ordinarily Resident
- income earned in India or income arising out of business controlled from
Non-resident - only income earned
in India taxable.
EXEMPT FOR NON-RESIDENT
1.Interest on notified securities
or bonds and premium on re-demption of such securities. (S.10(4)(i)).
2.Interest on NRE/FCNR Accounts.
3.Interest on notified saving
certificates subscribed in foreign currency by an Indian citizen/person
of Indian origin. (S.10(4B)).
4.Income from units of UTI
acquired in foreign exchange by Indian citizen/person of Indian origin.
(S. 32(I)(aa) of UTI Act)
5.Interest on NRNR Deposits
and other securities, bonds, sav-ings certificates notified S.10(15)(i)
6.Interest from notified
bonds (7 year dollar bonds issued by the S.B.I. notified) purchased in
foreign exchange, exemption continues even after person becomes resident.
7.Interest paid by scheduled
banks on RBI approved foreign currency deposits, to a NR or NOR (S. 10(15)(ivfa)).
FOR NRIS - CHAPTER XIIA
a.NRI means an Individual,
being a citizen of India or a person of Indian origin, who is 'not a resident'.
b.Investment income : income
derived from a foreign exchange asset.
c.Foreign Exchange Assets:
specified asset acquired by NRI out of convertible foreign exchange.
d.Specified assets are:
i.Shares of an Indian company.
ii.Debentures of or deposits with
an Indian company, not being a private company.
iii.Any security of the Central
iv.Other notified assets (no such
asset has yet been notified).
S.115F : Exemptions for long-term
Capital gains arising on transfer
of a specified asset, is exempt from levy of any tax on fulfillment of
the following conditions:
a.The asset transferred must
be a long-term capital asset.
b.Net consideration must
invested in certain specified assets
c.Investment to be made within
6 months of transfer.
d.If only a portion of the
net consideration is reinvested, then proportionate exemption is allowed.
e.New asset must be held
for at least three years.
S.115G : Option not to file income
NRI need not furnish a return of
his income, if :-
a.his total income consists
only of investment income or incomes by way of long-term capital gains
or both, and
b.TDS has been deducted from
S.115H : Continuance after NRI
Chapter-XIIA shall continue to apply
to such income even after an NRI becomes a resident, if he furnishes a
declaration along with the Return of Income to that effect. Tax would then
be levied at 20% until transfer/conversion into money of such assets.
S.115I : NRI may opt out:
An NRI may elect not to be governed
by the provisions of Chapter XIIA for any A.Y. by furnishing a written
declaration to the A.O. with his return of income. His total income for
A.Y. shall be computed and tax on
such total income shall be charged in accordance with the other provisions
of the Act.
FOR CAPITAL GAINS(SPECIFIED ASSETS)
Expl. to S.48(1)(a) : Convert original
cost, expenditure on trans-fer and sale consideration into foreign currency
in which investment was made (at prescribed rates) and reconvert capital
gains into rupees again. The benefit of indexation will not be available
to the NRI.