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| | | | | NRI Tax issues by NRILegalAid | | | The NRI tax liability only arises if the income has been earned in India from some rental property in India, any salary that has been earned in India from any company that is based in India or from any Indian company that is set up in the country where the NRI is working. The NRI tax liability also arises from any non-specific assets that are purchased in India. The NRI tax liability is not incurred from the income from specified assets or any long term capital gains.
It is a strange fact but it is true that most of the NRIs are not even aware of the fact that they have to incur NRI tax liability in India. But in incurring the NRI tax liability, NRIs have to pay tax which is generally much more than the actual liability and thus loss is suffered by the NRIs in discharging their tax liability.
The categories of taxable incomes include the income generated from any royalty received on account of the services, any kind of professional services rendered in India, earnings from any company that is engaged in business in India or from an Indian company set up abroad where the NRI has discharged duty, or any rent received from the property in India etc. Whereas, the income which has been generated in India from any long term capital gains are not taxable in India.
NRI tax liability is also limited to the abovementioned categories and if in any case the NRI is taxed more than his liability then the NRI can also claim the return of the over tax paid.
NRI tax liability is also on the wealth that is generated in India, jewellery, gold and such other un-productive assets and not on any wealth in any foreign country abroad. The interest received from the NRE accounts are not charged with interest whereas NRO accounts are liable to be taxed. On the other hand, the government of India has also made specific provisions for the welfare of NRIs. The Income tax act gives concessions to NRIs for some types of incomes. The Chapter XIIA of the Income Tax Act has specific sections from 115C to 115I. Concessions on tax up to certain percentage are given in the investment in long term capital gains. Gifts are also not taxed in this respect. But it is necessary for all the Indians who go out of India for employment to apply for an IT clearance certificate so that there are no problems in their visa procurement or any other case. Simple procedures, tax on only the real income, tax deduction at source and also fixed rate of interests are some of the many privileges given to NRIs.
However, even after the simple nature of the tax laws and the concessions offered there is a need to consult expert tax law professionals or outsourcing executives to have the best advice in this field.
| | | | Article Source : Article-treasure.com | | Publication date : 02-23-2010 | | | | Article by NRILegalAid | | | | Raina Sabharwal
| | | | Keywords : Tax is generally imposed in the country of residence or in the place where the person resides permanently or has business. However, in some exceptiona | | | | |
