RESIDENT OUTSIDE INDIA:  Definition of NRI under the foreign exchange  
         act differs from that under he incometax act. Under foreign 
         exchange act taking up a job or intention to live abroad will 
         be enoujgh to claim NRI status. Under the I.T.act. numbers of 
         days lived outside india under various categories have to be 
         considered to claim NR status.

SPECIAL PROVISIONS :
        (1) Interest from Non-resident(external) account with any bank in
        India  is exempt from income tax.

        (2)Income derived from investments in(A)Shares);(B)Debentures of
        any Indian co.;  (C)Deposits with companies; (D) govt securities
        &(E) other notified assets will be taxed at a flat rate of 20% or
        at the rates applicable on their total income at the option of the
        assesse.(it is advantages for assessees at higher income group to
        opt for flat rate of 20%). No deductions are allowed if the flat 
        rate is opted . If the regular rate is opted, permissible 
        deductions are  allowed.

       (3) A NRI , who becomes resident in subsequent years,has the option to
        claim the special provisions of taxation n respect of income derived 
        from Foreign  exchange assets.

       (4) Long term capital gains in respect of foreign exchange assets are 
       taxed at 20%.For arriving ata the FX gains, the cost of acquisition and 
       realisation on sale  should be converted into the same foreign currency
       as was initialy utillised for purchase and the capital gains computed in 
       foreign currency and then converted into rupees.
       Longa term Capital gains in respect of FX assets will be exempt to thh 
       extent of re-investment or re-deposit within 6 months of the date of 
       transfer.


(The page is under construction as on 15th October 1997

   

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