NON RESIDENT INDIAN TAXATION IN INDIA

Non-resident Indian and an individual of Indian root (NRI-PIO), also called Overseas Indians or Indian Diaspora, are people of Indian birth or origin who live outside the Republic of India. As per Ministry of External Affairs report there are more or less 30.8 million Indian diaspora living outside India. India has the largest dia population in the world with over 15.6 million according to United Nations Department of Economic and Social Affairs. The term non-resident refers only to the tax position of a person who as per section 6 of the Income-tax Act of 1961, has not resided in India for a specific period for the intention of the Income Tax Act.

The rates of income tax are different for persons who are "resident in India" and for NRIs. For the goal of the Income Tax Act, "residence in India" requires stay in India of at least 182 days in a financial year or 365 days dispersed out over four successive years and at least 60 days in that year. According to the act, people of Indian origin who does not meet the criteria as a "resident of India" is a non-resident of India and is treated as NRI for paying income tax.

If you want to know more about NRI taxation simply search Non Resident Indian Taxation and if you are based in Delhi and looking for the best income tax service provider you can search NRI Taxation Service in Delhi in the net.

A person who is non-resident is likely to tax on that income only which is attained by him in India. Income is earned in India if –

• It is directly or indirectly received in India; or

• It accrues in India or the law construes it as having accrued in India.

The following are some of the instances when the law construes the income to have accrued in India:-

• income from business arising through any business connection in India;

• income from property if such property is situated in India;

• income from any asset or source if such asset or source is in India;

• income from salaries if the services are rendered in India.

In such cases wage for rest of the period or leave period will be regarded as earned in India if it forms part of the service contract,.

1. income from salaries payable by the Government to a citizen of India even though the services are rendered outside India;

2. income from dividend paid by an Indian company even if the same is paid outside India;

3. income by way of interest payable by Government or by any other person in certain circumstances ;

4. income by way of Royalty if payable by the Govern­ment or by any other person in certain circumstances;

5. income by way of fees for technical services if such fees is payable by the Government or by any other person in certain circumstances.

The following income even though appearing to be arising in India are construed as not arising in India:-

1. If a non-resident running a news agency or publishing newspapers, magazines etc. earns income from activities confined to the collection of news and views in India for transmission outside India, such income is not considered to have arisen in India.

2. In the case of a non-resident, no income shall be considered to have arisen in India if it arises from operations which are confined to the shooting of any cinematography film. This applies to the following types of non-residents:-

– individual who is not a citizen of India; or

– firm which does not have any partner who is a citizen of India or who is resident in India; or

– company which does not have any shareholder who is resident in India.

Are you an NRI and want to buy or sell property in India?

Though with FEMA the foreign exchange laws have been modified and diluted significantly but due to the legacy of FERA excesses during old days, NRI people are very apprehensive while dealing in with any immovable properties in India. Since the matter of purchase of immovable property in India by NRIs is covered under the provisions of FEMA, it is advisable to understand the legal position. RBI has issued a notification granting a general permission to NRIs for purchase of certain immovable properties in India without obtaining any specific permission from RBI.

So Indian Citizens who have become NRIs, for FEMA purposes can acquire certain immobile property situated in India without any specific permission from RBI. If you want to know more about properties for NRI type Purchase and sale of property for NRI in Delhi. Though RBI has given general permission to the NRIs to purchase immovable properties in India, the permission does not grant power to acquire any and every property in India. The NRIs are allowed to purchase only residential or commercial property. So NRIs cannot purchase any agricultural land or plantation property.

Since it is fashionable to own a farmhouse, let me make it very clear that under the existing dispensations, NRIs cannot purchase a farmhouse in India. This way as long as the investment being made by NRIs in India is either in residential property or commercial property, they are not even required to intimate RBI about such purchases, even post conclusion of the transaction. Moreover there is no restriction as to the number of residential or commercial property an NRI can acquire. An NRI can only sell residential or commercial property in India to a person residing in India or to an NRI or a PIO (Person of Indian Origin).

Under general permission, an NRI can sell his agricultural land/plantation property/farm house in India only to a person who is a resident of India and is an Indian citizen.

Today, remittance of funds from property sales is simple and hassle-free for the benefit of NRIs. However, the NRI must ensure that he/she is well guided by a legal expert in matters of property sale in India and must also be wary of fake property dealers. It is best to hire authorized dealers so that the property and sale is handled in safe and appropriate manner.