NEW INDIAN RULES FOR TAXATION

All NRI pls read carefully, if you stay in India for 60 days plus in a year, you are not considered an NRI under the new Income Tax rules. You will be taxed as any other local tax payers. The IT rule is appended at the end of the circular.

NEW INDIAN RULES FOR TAXATION FROM APRIL/2010 - AN NRI IS NOT CONSIDERED AS NRI IF HE COMES TO INDIA   FOR 60 DAYS & MORE IN A YEAR BUT WILL BE TAXED ON HIS ALL THE INCOME THE PERSON HAS EARNED IN THE FOREIGN COUNTY DURING THE YEAR.

IT DOES NOT MATTER WHETHER THE PERSON HAS LIVED OUTSIDE INDIA FOR DECADES.  THIS MEANS FROM NOW ON, IF AN NRI GOES TO INDIA EVEN FOR A FEW TRIPS AND THAT CUMULATES TO OVER 60 DAYS IN THE YEAR, WILL BE CONSIDERED AS A LOCAL CITIZEN AND WILL HAVE TO DECLARE HIS FOREIGN INCOME AND PAY TAX ON IT.

THEREFORE, HENCEFORTH GOING TO OUR OWN COUNTRY, WE WILL HAVE TO MAKE SURE THAT WE GO ONLY IN AN EMERGENCY BUT NOT TO MEET RELATIVES; NEITHER FOR A SOCIAL TRIP NOR FOR LONG MEDICAL CHECKUPS NRIs SHOULD NOW HAVE TO GET THEIR CHILDREN MARRIED IN FOREIGN COUNTRIES AND HOLD ALL THE OTHER CELEBRATIONS WITH CLOSE RELATIVES OUTSIDE INDIA. IT IS CHEAPER TO BUY TICKETS FOR CLOSE RELATIVES TO PARTICIPATE IN OUR CHILDRENS’ WEDDINGS IN FOREIGN COUNTRIES
IMPORTANT NEWS FOR NRIs!  NOW THAT THE INDIAN GOVERNMENT DOES NOT REQUIRE NRI’S FOREIGN EXCHANGE, WE WILL NOW BECOME NOT REQUIRED INDIANS.  PLEASE FORWARD THIS TO ALL YOUR NRI FRIENDS IN YOUR FORWARD LIST.     

THE NEW CLAUSE

UNDER CLAUSE 4 OF THE DIRECT TAXES CODE, WHICH IS TO COME INTO EFFECT FROM 1ST APRIL 2012, THE STATUS OF RESIDENT BUT NOT ORDINARILY RESIDENT, WHICH IS CURRENTLY AVAIALABLE UNDER SECTION 6 (6) OF THE INCOME TAX ACT OF 1961, IS SOUGHT TO BE REMOVED.

AFTER THE CODE COMES INTO FORCE, A PERSON WILL BECOME RESIDENT IN INDIA IN ANY FINANCIAL YEAR IF EITHER OF THE FOLLOWING TWO CONDITIONS IS FULFILLED:

A.   IF HE IS IN INDIA FOR A PERIOD OR PERIODS REPEAT PERIODS AGGREGATING TO 182 DAYS OR MORE IN A FINANCIAL YEAR OR

B.   IF HE IS IN INDIA FOR 60 DAYS OR MORE IN A FINANCIAL YEAR AND HAS ALSO BEEN IN INDIA FOR 365 DAYS OR MORE WITHIN THE FOUR YEARS IMMEDIATELY PRECEDING THAT FINANCIAL YEAR.

C.   THEREFORE, A NON RESIDENT INDIAN WOULD BECOME RESIDENT IN INDIA UNDER THE DIRECT TAX CODE IF EITHER OF THE AFORESAID TWO CONDITIONS IS FULFILLED, AND WILL BE LIABLE TO TAX IN INDIA ON HIS WORLD INCOME. THIS WOULD BE NOT WITHSTANDING THE FACT THE HE MAY  BE A PERSON RESIDENT OUTSIDE INDIA UNDER THE PROVISTIONS OF THE FOREIGN EXCHANGE MANAGEMENT ACT 1999. 

by mail from :Nowshathali Mohamedali