With a view to attract investment by Non-resident Indians and Indian
Nationals living abroad, special provisions exist in Chapter XIIA
providing incentives in the form of reliefs and concessional tax rate as
also simplifying the tax assessment procedure for such persons.
Non-resident Indian has been defined as an individual, being a citizen
of India or a person of India origin, who is not a resident. A person is
of Indian origin if he or either of his parents or any of his grand
parents was born in undivided India. These special provisions are dealt
with in Chapter XI.
Non-resident persons have been given a special status under the
incometax law. Besides the general provisions for computation of
long-term capital gains and the tax liability thereon, contained in
section 48 and section 112,Chapter XII-A (comprising of sections 115C to
115-I) contains special provisions relating to certain incomes of
non-resident Indians (NRIs). Section 115AC makes provision for tax on
income from bonds or shares purchased in foreign currency or capital
gains arising from their transfer'. Besides, the provisions of Section
115A have been extended to non-residents, besides foreign companies,
regarding tax on dividends, interest on foreign currency debts and
income from units of mutual fund.
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