Non-Resident Indians (NRIs) are facing a revised tax structure following recent changes announced in the Union Budget. Effective from July 23, 2024, capital gains tax on listed equity shares and equity-oriented mutual funds has been increased from 15% to 20%.
While NRIs generally pay tax only on income earned or received in India, the new regulations have brought about significant changes. Experts suggest that NRIs carefully assess their investment portfolios and consult tax professionals to understand the implications of these changes.
Key points for NRIs:
Increased capital gains tax: Short-term capital gains on listed equities and equity-oriented mutual funds now attract a higher tax rate.
Income from Indian sources: Income earned or received from India, including salary, rental income, and capital gains, is taxable.
Residential status: NRIs can be classified as residents, non-residents, or deemed residents based on their stay in India during a financial year. This classification determines the extent of taxation.
Double Taxation Avoidance Agreements (DTAAs): India has DTAAs with several countries to prevent double taxation. NRIs can avail benefits under these agreements to reduce their tax liability.
Tax experts advise NRIs to stay updated with the latest tax regulations and seek professional advice to ensure compliance and optimize their tax planning.
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