New Delhi February 28, 2005
In a major benefit to NRIs, finance minister P Chidambaram
today extended tax exemption on interest in non-resident
(external) account and on interest payable by a scheduled
bank to non-resident Indians.
At present, interest income accrued
before March 31, 2005, on money deposited in an NR(E)
account in any bank is exempt from income tax.
Similarly, the interest payable by
a scheduled bank before April 1, 2005 to a non-resident
or a person who is not ordinarily resident on deposits
in foreign currency where the acceptance of such deposits
by the bank is approved by the RBI is exempt from
income tax.
Both these exemptions would now also
be available after April 1, 2005, as per the budget
proposals for 2005-06.
However, these amendments would be
in effect from April 1, 2006, and apply in relation
to the assessment year 2006-07 and subsequent years
(PTI)
