Claiming Tax Benefits: Section 115H and NRIs in India!

Section 115H of the Income Tax Act, 1961, India, provides for a concessional tax rate for certain incomes earned by non-resident Indians (NRIs). The concessional tax rate is available for investment income and long-term capital gains.

The following are the key provisions of Section 115H:

  • Applicability: Section 115H applies to NRIs who are not liable to tax in India in respect of their total income.
  • Investment income: The concessional tax rate of 20% is available for investment income, such as interest, dividends, and rent.
  • Long-term capital gains: The concessional tax rate of 10% is available for long-term capital gains, such as gains arising from the sale of shares, mutual funds, and other assets.
  • Conditions: The concessional tax rate is available subject to the following conditions:
    • The NRI must have been a non-resident in India for at least 12 months in the previous year.
    • The investment income or long-term capital gains must arise from assets that are held outside India.

Here is an example of how Section 115H works:

  • Mr. X is an NRI who is not liable to tax in India in respect of his total income. He earns interest income of Rs. 1 lakh from a bank account in the United States.
  • The interest income is eligible for the concessional tax rate of 20%. This means that Mr. X will have to pay tax of Rs. 20,000 on the interest income.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

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