For Quick Alerts
For Daily Alerts

Impact of The Union Budget 2016-17 On NRIs


Non Resident Indians (NRIs) were being treated unfairly, when it came to tax deducted at source on many instruments, particularly fixed deposits.

An NRO has to pay in excess of 30 per cent as TDS on NRO deposits, unless of course the relevant DTAA documents are submitted.

Impact of The Union Budget 2016-17 On NRIs
NRIs without PAN were being unfairly treated with higher tax rate. "Non-residents without PAN are currently subjected to a higher rate of TDS. Union Budget 2016-17 proposes to amend section 206AA of the Income-tax Act so as to provide that TDS shall not be deducted at a higher rate in case of non-residents not having PAN, subject to prescribed condition," said FM Arun Jaitley.

This is a welcome move, as Tax deducted at Source is severe for Non Resident Indians (NRIs).

So, one can gain on NRO Deposits, though NRE Deposits do not attract any tax, so there is not question of TDS at all.

An NRI is defined as one who stays in the country for a continuous period of more than 182 days.

These Non Resident Indians, tend to open either NRE Accounts and later open NRE Fixed Deposits Or NRO Accounts and later NRO Fixed deposits.

For receiving domestic payments, the latter is a must. For example, if the NRI has rental income, than he has to open a NRO account. Now, even if this NRO savings accounts has some balances, he will attract an interest, which is subject to TDS of over 30 per cent.

In the case of a domestic resident savings account, there is no TDS cut, if the interest income is below Rs 10,000 in a savings banks account. This is not applicable for NRO accounts and hence there are some disparities.

The Union Budget 2016-17, has taken the first step to make it fair, by ensuring that if a certain conditions was prescribed, they would not be subject to a harsher TDS.

Read more about: union budget 2016
Story first published: Tuesday, March 1, 2016, 9:34 [IST]
Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more