Nobody is sure about whether the DTC will be implemented w.e.f 1 April,2012. The Hon'ble Finance Minister has presented the Direct Tax Code Bill, 2010 ('DTC Bill') on August 30, 2010, which is proposed to be effective from April 1, 2012. The DTC Bill is likely to be presented before the Indian Parliament thereafter. Accordingly, it is currently unclear what effect the Direct Tax Code would have on the investors especially NRIs. This is just a proposal, may be implemented with modifications. The DTC might see another year's delay. Just wait and see..
For the last few months financial advisors and ordinary investors have been worried about how savings and investment structure will have to be changed because of the Direct Tax Code. Once its implemented practically all the popular tax savings instruments tax savers are using for years become irrelevant.. For example, ELSS mutual funds, National Savings Certificates (NSC) and ULIPs will no longer be the easy and automatic options tax-savers that they are now. Tax-saving patterns will change drastically when the DTC comes into effect. Broadly, the DTC tends to higher limits and a much smaller menu from which tax-saving investments have to be chosen. Like this lot of changes are proposed in the forthcoming DTC.
Best RegardsPrakash Nair
From: Sivaraman Natrajan <sivaraman.nn@gmail.com>
I am a bit confused here. On one hand, the government has relaxed the rules to allow banks to increase NRI accounts interest rates, while on the other hand, we have this kind of news.
To: indians_in_ksa@yahoogroups.com
Sent: Saturday, December 31, 2011 4:25 PM
Subject: Re: <<<Indians in KSA>>> ~ Fw: NEW NRI STATUS FOR TAXATION - APRIL/2012 (Courtesy:Fwd)
It would really help if someone like Mr. Prakash Nair can enlighten us here .....
Regards,
Siva
On Sat, Dec 31, 2011 at 4:00 PM, F.KHAN <firdos29@yahoo.com> wrote:
Dear freinds,any one can confirm below news?
FIRDOS KHAN
Impossible Itself Consists I M Possible.
Remember Me Always in your Prayers,As received....NEW INDIAN RULES FOR TAXATION FROM APRIL/2012
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 children's weddings in foreign countriesImportant 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 CLAUSEUnder 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 available 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:
· If he is in India for a period or periods repeat periods aggregating to 182 days or more in a financial yearOR
· 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.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 notwithstanding the fact the he may be a person resident outside India under the provisions of the foreign exchange management act 1999.
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