BUDGET 2014 - 15: Special Income Tax Rates for NRIs

Special Rates for Non-Resident Indians (NRIs)

 The following incomes in the case of non-resident Indians are taxed at special rates on a gross basis:

Nature of Income	Rates
Dividend	20%
Interest received on loans given in foreign currency to Indian concern or GOI (Govt Of India)	20%
Interest received on notified  Infrastructure debt fund	5%
Interest received from Indian Company	5%
or Business Trust on monies borrowed
in foreign currency and approved by
the Central government:
– Under a loan agreement borrowed from 1 July 2012 to 30 June 2017
– By issue of long term infrastructure bond from 1 July 2012 to 30 June 2017
– By issue of long term bond from 1 October 2014 to 30 June 2017
Interest income received by FII or QFI on rupee denominated bonds or government securities	5 %
Distributed income in the nature of interest received by the unit holder from business trust	5 %
Income received in respect of units purchased in foreign currency of specified Mutual Funds (MFs) / UTI	20 %
Royalty  For Agreements entered into monies borrowed in foreign currency and approved by the Central government:
On or after 1 April 1961 but before 1 April 1976	50 %
– On or after 1 April 1976 -	25 %
FTS For Agreements entered into
– On or after 1 March 1964 but before 1 April 1976  at	50 %
–– On or after 1 April 1976  at	25 %
Interest on FCCB, FCEB /dividends on GDRs	10 %

(1)  For a foreign company, 2% surcharge shall be applicable, where the total income exceeds Rs. 10,000,000 but does not exceed Rs. 100,000,000 and at 5% where the total income exceeds Rs. 100,000,000.

For other persons, a 10% per cent surcharge shall be applicable, where the total income exceeds Rs. 10,000,000. Marginal relief available.

(2)  A 3% education cess is applicable on income tax (inclusive of surcharge, if any).

(3)  Other than dividends on which DDT has been paid.

(4) If the non-resident has a PE in India and the royalties/ fees for technical services paid are effectively connected with such PE, this could be taxed at 40 per cent (plus surcharge and education cess) on net basis.

Share: