Non-resident Indians (NRIs) enjoy a host of privileges. Banking for NRIs has often been a subject of concern. Most NRIs have their families back in India. This means not only do the NRIs have to deal with problems related to transferring money through traditional banking techniques but they also face a certain degree of discomfort in personal banking methodologies and most importantly for taxation purposes. But more recently, major Indian banks have flexed their offerings enough to ease the financial dealings of NRIs.
According to the Income Tax Act of 1961, a person is termed as an NRI if he or she does not stay in India for a period of 182 days over a financial year starting 1st April to 31st March. Income tax for an NRI is mainly based on the income he/she generates in India.
NRI taxes fall under a multitude of sections which includes sections for Capital Gains, Investments etc. In respect of Capital Gains under the Income-tax Act, 1961 one is not liable to Income-tax if he reinvests in specified assets or if he has capital loss in other assets.
Taxes for NRIs are levied as per government standards. Recently there have been a large number of tax evaders which has prompted the Government of India to step up collecting information about large financial transactions is concerned and also about tracking tax evaders.
There is also a very strong movement to make many processes relating to tax administration electronic and automated that will help NRIs. This would ensure that the Income-tax department has a central database of all tax payers in the country along with details of large financial transactions entered into by each such person in a year.
Banks can now help NRIs out with their taxation by providing them with investment options other facilities. NRIs can save tax by various ways and there are professionals who provide services for NRI and help them achieve their goal.