The Hindu Business Line : NRI body wants proposal to tax interest on NRE, FCNR deposits withdrawn

A NRI welfare organisation in the UAE has requested the Finance Minister, Mr P. Chidambaram, to withdraw the proposal to tax interest on NRE and FCNR deposits and has suggested a series of NRI-related measures for consideration in the upcoming Union Budget including special investment schemes and an infrastructure development bond.

The Pravasi Bandhu Welfare Trust Chairman, Mr K.V. Shamsudheen, has in a letter to the Finance Minister, called for withdrawal of the tax on NRE deposits, proposed to be implemented from April 2006.

He said it would greatly benefit the majority of NRIs in the Gulf, who fall in the low and middle-income category. This section of NRIs do not come under the income-tax bracket, but would anyway have to file returns to get back tax deducted at source, he said. This would pose difficulties as they do not travel to India often and cannot ask anyone to act on their behalf.

The Trust has also requested the Government to introduce an investment scheme for middle and low income NRIs living in the Gulf. This fund could create a corpus for the future resettlement of these NRIs and it will provide a regular income when they return home for good.

It has also suggested that an infrastructure development bond be launched with attractive returns. The bond could be used as a long-term saving vehicle for NRIs for resettlement and rehabilitation.

The Trust also called for more opportunities for NRIs to participate in the public issues. Presently, NRIs are facing limitations due to their inability to open depository accounts from their place of residence in the Gulf. The option of applying for public issue in the traditional format should be given to NRIs till they can open depository accounts, the memorandum suggested.

The Trust also urged that stock trading terminals be provided abroad and called for correction in the anomaly in short-term capital gains tax, as NRIs are at present continuing to pay the tax, though it has been withdrawn, due to a printing mistake that states that the concession is only for resident Indians.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Needed, a fair deal for NBFCs

SBT to be fully networked soon

Why not Nabard be bank for agriculture?

Pre-Budget sentiment bullish on bonds

Bank officers' union flays PSB autonomy package

Allahabad Bank to pay 15 pc interim

NSFDC concern over low recovery rate in AP

Interest rate signals unlikely in Budget

AMP Sanmar cover for TMB deposit scheme

NRI body wants proposal to tax interest on NRE, FCNR deposits withdrawn