NRIs need not file return on income
Section 139 of the Income Tax Act 1961
provides that every person if his total income or the total income
of any other person in respect of which he is assessable under the
Act during the previous year exceeded the maximum amount which is
not chargeable to Income tax, shall, before the due date furnish, a
Return of Income in the prescribed form and verified in the
prescribed manner.
Section 115G of the Income Tax Act
1961, provides that on certain circumstances non-resident Indian are
exempted in filing the Return of Income. This in other words, on
certain conditions, the non-resident Indian need not file the Return
of Income.
The conditions to be satisfied for
non-filing the return of Income are mentioned below:
1.
Where the total income of the non resident
Indian consists only of investment income and income by way of long
term capital gain, and
2.
The tax deductible at source has been deducted
from such income.
When it refers to long-term capital
gain, question arises whether the long-term capital arising other
than from the investment income could also be exempted from filing
the Return of Income?
The Central Board of Direct Taxes, Ministry of Finance in
Circular No.372, dated 8.12.1983 has clarified; the relevant Paras
of the Circular are reproduced for ready reference:
Non Resident Indians having only investment income or/and
long term capital gain Not required to file return of income
provided tax has been deducted at source there
from
The Investment Income means any income
derived (other than
dividends referred to in section 115 O) from a foreign exchange asset. Foreign Exchange
Asset means any specified asset which the assessee has acquired or
purchased with, or subscribed in convertible foreign exchange.
Similarly, section 115C(e), defines, Long-term Capital gains, which
means income chargeable under the head capital gains relating to
capital asset, being a foreign exchange asset which is not a short
term capital asset.
Therefore, Income derived from a foreign
exchange asset either Investment income or long-term capital gain,
as long as tax has been deducted at source, then, there is no need
to file the return of Income.
For the columns authored by Suresh in "N. Suresh Column", please click here.
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