money matters for NRIs
Taxation for NRIs

Non-resident Indian is defined as a person who is origin of India or a citizen on India but not a resident. There are several provisions for the NRI's under the Income Tax Law such as tax on income from bonds or shares purchased in foreign currency or capital gains arising from their transfer, tax on dividends, interest on foreign currency debts and income from units of mutual fund.

Sr No

Type of Income

Rate

1.

Dividends

20%

2.

Income received on purchasing units in foreign currency

20%

3.

Income received on purchasing units in foreign currency

20%

4.

Income received on purchasing units in foreign currency

10% after 01/06/05

5.

Interest on FCCB

10% 

Taxable income of NRIs

The NRI's income is considered to be earned in India if it is directly or indirectly received in India or if it accrues in India.

Income construes to have accrued in India in the following instances:

  • Income arising through any business connection in India
  • Income from property, if it is situated in India
  • Income from any asset or source if it is in India
  • Income from interest payable by Government
  • Income from dividend paid by an Indian company even if the same is paid outside India
  • Income by way of Royalty if payable by the Government
  • Income from salary, if the services are rendered in India
  • Income from salary paid to a citizen of India even though the services are rendered outside India
  • Income by way of fees for technical services if such fees is payable by the Government

The following incomes are construed as not arising in India, even though they appear to be arising in India:

  • No income shall be considered to have arisen in India if it arises from shooting of any cinematography film. This applies to non-resident who is an individual but is not a citizen; firm which does not have any partner who is a citizen; company which does not have any shareholder who is a resident in India
  • If a non-resident who is running a news agency, magazines etc and earn income from activities confined to collection of news in India for transmission outside India, such income is not considered to have arisen in India.

A non-resident in India may be assessed either directly or through agents. The agents may be employee or trustee of the non-resident, person  who has any business connection with them, any person through whom the non-resident receives any income or the one who has acquired a capital asset in India from the non-resident. 

A broker in India is not considered as an agent of the non-resident if he has independent dealings with a non-resident broker acting on behalf of the non-resident principal and if the transaction between them is carried on in the ordinary course of their business.


Get the all financial products under one roof only at

you will NEVER GO WRONG with us!

Unbiased . Best Deals . Appropriate Products . No Mis-selling