1 / 6

Section-115C-Tax-Relief-for-NRI-Foreign-Exchange-Assets (1)

The Primary objective of Section 115C which was introduced in the Income Tax Act 1988, is to facilitate tax relief for NRIs (Non Resident Indians) who earn income through foreign exchange assets. <br><br>These foreign exchange assets can be in any form; bank deposits, shares, securities or any other similar asset.

wealthmunshi
Download Presentation

Section-115C-Tax-Relief-for-NRI-Foreign-Exchange-Assets (1)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Section 115C: Tax Relief for NRI Foreign Exchange Assets Section 115C of the Income Tax Act 1988 provides tax relief for Non- Resident Indians earning income through foreign exchange assets like bank deposits, shares, and securities. This regime applies exclusively to NRIs who live outside India for more than 182 days in the financial year.

  2. Who Qualifies as an NRI Under Section 115C? Residency Test Documentation Must not live in India for more than 182 days in the financial year Valid proof of residence in current resident country required Income Source Must earn income through foreign exchange assets like deposits, shares, securities This definition differs from Section 6's general residential status rules, which focus solely on days stayed in India regardless of income source.

  3. Eligible Investments Under Special Tax Regime 1 Indian Company Shares All equity shares of Indian companies (public or private) purchased via foreign currency 2 Debentures Non-convertible debentures issued by Indian public companies 3 Fixed Deposits Term deposits maintained with Indian public companies 4 Government Securities Bonds or savings certificates issued by Government of India 5 Other Notified Assets Additional assets specified by Indian Government from time to time All investments must be made through prescribed channels like NRE/FCNR accounts to qualify for tax benefits.

  4. Real-World Tax Scenarios for NRIs Tax-Free Interest: Ravi's Case 1 NRI invests in government bonds using USD through NRE Account. Interest earned is tax-free under Section 10(40)(II) when conditions are met. Equity Capital Gains: Anita's Case NRI purchases listed Indian company shares with foreign currency. Long- term capital gains are exempt from indexation with only 10% tax under Section 115E. 2 Returning to India: Kumar's Case 3 Earns only LTCG from eligible assets under Section 115E. If TDS is deducted and no other income exists, no ITR filing required (Section 115G).

  5. Continuation Benefits After Returning Priya's Success Story Returns to India but retains eligible NRI investments made earlier. She continues enjoying tax benefits from Section 115E on those investments until maturity under Section 115H. This provision ensures NRIs don't lose tax advantages when they become residents again. Protected Benefits Until Maturity Tax advantages continue post-return Benefits last until investment matures

  6. Maximize Your Tax Savings Strategic Advantage Expert Guidance Whether investing from abroad or returning to India with existing NRI investments, these provisions significantly reduce tax liability. Since each situation is unique, consult a qualified tax advisor to optimize your investment strategy and ensure compliance. Consult Tax Advisor Learn More

More Related