Thursday, January 12, 2012

[] When NRIs missed a heart beat



A hoax news report on the Web, "announcing" the imposition of "a flat 30% tax on all NRIs over their income" has created a flutter among overseas Indians in the Gulf.

MUMBAI – A hoax news report on the Web, "announcing" the imposition of "a flat 30 per cent tax on all NRIs over their world-wide income" has created a flutter among sections of overseas Indians in the Gulf.
The badly-written "report" — it is in a jpeg image format and alleged to be a clipping of an article in the Times of India on January 8 (the paper has not published any such report) — rambles on in a confused manner, with the "author" stringing together bits and pieces of news culled from various sources. The "report" cites Vayalar Ravi, Overseas Indian Affairs Minister, announcing the imposition of the 30 per cent tax on NRIs at the Pravasi Bharatiya Divas (PBD) in Jaipur last week, not knowing that such important decisions are not announced by a minister at a function. Only the finance minister of the country can make such announcements in parliament.  At the Jaipur gathering, Ravi was involved in an angry exchange with a group of NRIs over the alleged "unfriendly investment scenario" in India. Ravi lost his cool and ticked them off, telling them not to make speeches.
perhaps some of those who were annoyed by him and other ministers at the meeting decided to hit back by sending off the hoax mail containing the most bizarre claims, trying to scare NRIs.
NRIs remitted more than $50 billion in funds to India last year, channellising their savings into the country. Even a minor change in any income-tax, customs or foreign exchange regulation relating to investments or taxation of NRIs is done after months of discussion among various stakeholders, meetings by expert committees, approvals from the Reserve Bank of India and the union cabinet.
For all its shortcomings, Indian democracy has a very elaborate procedure, especially relating to major announcements affecting millions of people; these are not done arbitrarily by ministers at gatherings.
In fact, Finance Minister Pranab Mukherjee has allayed misconceptions about the proposed direct tax code (DTC) at the NRI meeting in Jaipur. Some NRIs had expressed fears that the DTC would result in their having to pay income-tax in India on their global income if they were to stay in India for a period of just 60 days in the country.
At present, NRIs have to pay income-tax at the usual rates (around 30 per cent) on their global income, if their stay in India in any financial year exceeds 182 days.
Mukherjee pointed out that as per the DTC proposal, an NRI would be deemed as resident only if he or she also resided in India for 365 days or more in the preceding four financial years, together with 60 days in any of these financial years. "Only when the two criteria are met will an individual be considered resident," said Mukherjee.
Moreover, even if an NRI were to become a resident Indian in a financial year, his global income did not immediately become liable to tax in the country, clarified Mukherjee. Global income would be taxable only if the NRI stayed in India for nine out of the 10 precedent years, or 730 days in the preceding seven years.
And no final decision has been taken so far, as the DTC bill is still under scrutiny by the standing committee of parliament, he noted.
  Source -
 Best Regards
Prakash Nair

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