Non-Residents - Introduction

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.