LTCG arising to NRI from specified asset are exempt from tax if the net sale consideration is invested in another specified asset within a period of 6 months from date of transfer of the original specified asset.
With respect to NRIs, the Act provides for special regime for computation of income. NRI has an option to be governed either under the normal regime or the special regime. Under special regime, tax rates are specified for certain nature of income earned.
NRI means an individual, being a citizen of India or a PIO who is not a resident as per the provisions of the Act. The meaning of the term ‘Resident’ and ‘PIO’ can be referred under the FAQ a. and h. respectively of Chapter 12: Residential Status.Such an individual can avail the benefits of special regime if his Gross Total Income consists of the below:
- Investment Income (defined in FAQ c. below) and/or
- LTCG
NRI is not required to file his ROI if his total income consists only of:-
- Investment income from specified asset
- LTCG from specified asset
AND tax on both incomes has been deducted at source as per provisions of the Act.
The special regime for taxation of NRI shall continue to apply to Mr. A, even when he becomes a Resident of India for such income derived from NRO deposits. The said special regime of taxation can be availed by NRI until the transfer / conversion (otherwise than by transfer) into money of such assets i.e., on maturity or closure of the deposit by premature withdrawal.
No. The said investment income from shares is specifically excluded. Hence, the special regime rates shall apply to the same only when Mr. A was a Non-Resident.
