- Arising from Business Connections in India
- Property in India
- From Asset/Source In/From India
- Salary Received for Services Rendered in India
- From Dividend Received From Shares In Dmat Account, By An Indian Company (Irrespective Of Whether The Same Has Been Paid Outside As Well)
- Arising from Interest Payable by the Government
- Royalties Payable to the Government
- Fees for Technical Services Payable by the Government
- Email ID : [email protected]
- Support : 011-43017214
- Office : +91 81421 20044
NRI Taxation
As per the Indian Income-Tax Act, 1961, an annual tax is
levied by the Government of India (GoI) on all income earned in India. In
other words, all receipts giving rise to income are taxable unless they are
specifically exempted from tax under the act.
Generally, NRI income taxes come into various categories, but specifically,
he has to pay tax in India only if his or her income, salary, allowance,
etc. is amassed in or from the Indian Territory. This stands true for
non-residents as well, but there are exceptions to the general rule. The law
may, at times, require money (income) to have been generated in India if it
is:
What are the taxes applicable to income from mutual funds for NRIs?
| Dividends | ||||
| Dividends | NRI | |||
| Equity schemes | Tax free | |||
| Debt schemes | Tax free | |||
Dividend Distribution Tax |
||||
| Dividend Distribution Tax | NRI | |||
| Equity schemes | Nil | |||
| Debt schemes | 14.163% (Tax + Surcharge + Cess)(12.5% + 10% + 3%) |
|||
| Money market and Liquid schemes | 28.325% (Tax + Surcharge + Cess)(25% + 10% + 3%) |
|||
| Capital Gains Tax | ||||
| Long Term Capital Gains Tax | NRI | |||
| Equity schemes | Nil | |||
| Debt schemes | 10% without Indexation or 20% with Indexation whichever is
lower With Indexation 11.33% (10% Tax + 10% Surcharge + 3% Cess) Without Indexation 22.66% (20% Tax + 10% Surcharge + 3% Cess) |
|||
| Short Term Capital Gains Tax | NRI | |||
| Equity schemes | 17% (15% Tax + 10% Surcharge + 3% Cess) | |||
| Debt schemes | 33.99% (30% Tax + 10% Surcharge + 3% Cess) | |||
Tax Deducted At Source (Applicable only to NRI Investors) |
||||
| Tax Deducted At Source | Short term | Long term | ||
| Equity | 11.33% | NIL | ||
| Debt | 33.99% | 22.66% | ||
Tax Benefits u/s 80 C |
||||
| The introduction of section 80C, in the Union Budget 2005, has allowed investors to save tax by investing in Equity Linked Savings Scheme (ELSS) schemes on investments upto Rs.1 Lac. and at the same time avail the growth potential of equity markets. | ||||
The following table draws a comparison of the investment avenues available under Section 80C |
||||
| Investment | Lock-in Time Period (In Years) |
Max Investment for Sec 80C Benefits (Rs.) |
% Return (CAGR) | Tax Treatment of interest |
| ELSS (Mutual Fund Schemes under Equity: Tax Planning Category) | 3 | 1,00,000 | 49.83 * | Dividend and Capital Gains Tax Free |
| Public Providend Fund (PPF) | 15 | 70,000 | 8 # | Tax Free |
| National Savings Certificate (NSC) | 6 | 1,00,000 | 8 # | Taxable |
