NRO deposit is “foreign exchange asset” subject to TDS @20 per cent

FM says inflation may hit double digit in March Authority for Advance Ruling rules the payments made to ABB Research Ltd., Zurich towards the applicant's share of the cost incurred in respect of R&D activities are not liable to be taxed under the Income Tax Act, 1961 as business income in the absence of permanent establishment in India, having regard to Art.7 of the Tax Treaty- Nor can it be subjected to tax as royalty or fees for technical services under Article 12 of the Treaty-AIT-2010-94-AAR Sensex hits 17400 Points in intra day trading Tariff Value for import of Brass Scrap is 3801 and for poppy seeds 4256-Customs Non-Tariff Notification No. 20 No approval for procurement of service “Rental” of immovable property for office outside the Special Economic Zone/FTWZ can be given-SEZ Instruction No. 49 on Clarifications on FTWZ issues Consolidated list of default authorized operations which can be undertaken by the developer/approved co-developer by default from the date of notification-SEZ Instruction No.50 Himachal Government hikes VAT from 4 per cent to 5 per cent on all items, except edible oils and foodgrains Authority for Advance Ruling rules no capital gains accrued or arose at the time of conversion of partnership firm into a private limited company under Part IX of the Companies Act and therefore, notwithstanding the non-compliance with clause (d) of proviso to Section 47(xiii) of the Income Tax Act, by reason of premature transfer of shares, the said company is not liable to pay capital gains tax-AIT-2010-93-AAR Authority for Advance Ruling rules if the purchasers are non-residents other than the applicant, the applicant is liable to pay tax in India on the amount received by it for the support services rendered through the branch office in India-AIT-2010-92 -AAR Jurisdiction of Dispute Resolution Panel-Income Tax Order No.3 Employment of washing process in the manufacture of agglomerates etc from imported plastic waste and scrap-SEZ Instruction No.48 Haryana Government imposes surcharge ranging from 0.25 per cent to 0.7 per cent on VAT Service Tax Notification No. 17/2010 which exempts the taxable service providing packaged or canned software, intended for single use and packed accordingly amended-Service Tax Notification No.18 Procurement, Import and Export of Prohibited and Restricted Goods by SEZ Units-SEZ Instruction No. 47 Authority for Advance Ruling rules the amounts received/receivable by Technopromexport from NTPC under contract for Offshore supply of all plant and equipment including mandatory spares are not liable to tax in India under the provisions of the Income-tax Act, 1961 and DTAA between India and Russia-AIT-2010-79-AAR

JUDGMENTS

CENTRAL EXCISE

CUSTOMS

exchange rate

SERVICE TAX

INCOME TAX

VAT

FINANCE ACTS

FINANCE BILLS

EOU STPI

SEZ

DGFT

RBI

NTT

RESOURCES

Email | Print

NRO deposit is “foreign exchange asset” subject to TDS @20 per cent

AIT News Network

NEW DELHI. Authority for Advance Rulings(Income-Tax) vide a ruling dated 3^rd March 2008 AIT-2008-80-AAR has ruled that the NRO deposit to be made by the applicant with convertible foreign exchange in a banking company which is not a private company, shall be treated as 'foreign exchange asset' under clause (b) of Section 115C of the Income Tax Act. Further, income by way of interest earned from the said NRO deposit shall be treated as 'investment income' under clause (c) of Section 115C and shall be liable to be taxed at the rate of twenty per cent under section 115E; and the banks paying interest on the NRO deposit of the applicant are required to deduct tax at source at the rate of twenty per cent.

The applicant, left India on 23 April, 2007 and is living in the Kingdom of Saudi Arabia. As he has spent more than 182 days outside India, he has claimed the status of a non-resident individual for the financial year 2007-08, corresponding to the assessment year 2008-09. He proposes to open a Non-resident Ordinary deposit (NRO account) with banks in India with the help of remittances from Saudi Arabia.

The applicant sought advance ruling of this Authority on the following questions:-

(i) Whether the non-resident ordinary (NRO) deposit acquired with convertible foreign exchange can be treated as a 'foreign exchange asset' under section 115C of the Income-tax Act, 1961?

(ii) Whether the interest on such NRO deposits can be treated as 'investment income' under sec. 115C of the Income-tax Act, 1961 and liable to be taxed at 20% only under sec. 115E?

(iii) At what rate tax is required to be deducted at source by the person responsible for paying such interest?

(iv) Whether form 15G can be accepted by the Banks?

(Click here for full text of Ruling AIT-2008-80-AAR)

· Authority rules on data recovered and re-imported in different media

· Imports for Power Projects exempt from Additional duty: Advance Ruling

· Salary paid by Infosys to non-resident employee taxable: AAR

· 10 per cent tax on sale of original and bonus shares by Foreign Resident

· Profit from Portfolio Investment not business income

· No capital gains on amalgamation of the wholly owned subsidiary foreign company with its parent company

· Non resident agents rendering services outside India & getting payment outside India liable to income tax in India : Advance Ruling

· Authority Settles Tax on Capital gains by Real Estate Developers

· Profits of dealings with HO by MNCs branch taxable