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Understanding the Benefits of Lower Tax Deduction Services for NRIs in India NRI Taxation Bharat · Follow 4 min read · 1 day ago
Introduction:India is home to a large number of Non-Resident Indians (NRIs) who have left the country in search of better opportunities and greener pastures. These NRIs have continued to contribute to the Indian economy in various ways, including remittances, investments, and even returning to the country to start businesses. However, one issue that has always been a matter of concern for NRIs is the high tax deductions they face in India. In recent years, the Indian government has taken steps to address this issue and has introduced lower tax deductions for NRIs, making it more attractive for them to invest and contribute to the country’s growth. Lower Tax Deduction for NRIs:In the past, NRIs faced a high tax deduction in India, which was a major deterrent for them to invest or return to the country. The tax deduction for NRIs was higher than that for residents, making it unfair and discouraging for them to invest in the Indian market. However, with the introduction of lower tax deduction for NRI in India, this issue has been addressed, and it has opened up new opportunities for them to invest in the country. Reduction in TDS Rates:-
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One of the major changes that have been introduced by the government Accessis the best member-only stories. the reduction in TDS (Tax Deducted at Source) rates for NRIs. Earlier, the Distraction-free reading. No ads. Support independent authors. TDS rates for NRIs were higher than those of residents, which made it Organize your knowledge with lists and
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in various financial instruments such as fixed highlights. Sign up to discoverunattractive human for them to invest Read offline. deposits, bonds, and mutual funds. However, with the reduction in TDS Tell your story. Find your audience. stories that deepen your Join the Partner Program and earn for rates, NRIs can now enjoy the same rates as residents, making it more understanding of the world. your writing. lucrative for them to invest in these instruments. Sign up for free
The TDS rates for NRIs have been reduced in various categories, such as
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interest income, capital gains, and rental income. This has not only made it easier for NRIs to invest in these instruments but has also made the tax system more equitable for them.
Relief for NRs returning to India:Another significant change that has been introduced to provide relief to NRIs is the introduction of a new section in the Income Tax Act, of 1961. This section, known as Section 115H, provides relief to NRIs who are returning to India after staying abroad for an extended period. According to this section, NRIs who have been living abroad for more than nine years will be considered residents for tax purposes in the year of their return. This means that they will be entitled to the same tax deductions and exemptions as residents, making it easier for them to transition back to the Indian tax system. This step has been welcomed by NRIs as it not only provides them with relief from the high tax deductions but also encourages them to return to India and contribute to the country’s growth. New tax residency rules for NRIs:Apart from the reduction in TDS rates and the introduction of Section 115H, the Indian government has also introduced new tax residency rules for NRIs. As per these rules, an NRI will be considered a ‘resident’ for tax purposes if he or she stays in India for 120 days or more in a financial year, as compared to the previous limit of 182 days. This change will benefit NRIs who visit India frequently for various reasons and will prevent them from being classified as residents for tax purposes. Impact on the Indian Economy The introduction of lower tax deduction for NRI in India has had a significant impact on the Indian economy. It has not only encouraged NRIs to invest in the country but has also made it easier for them to return and contribute to the economy. This, in turn, has led to an increase in foreign investments and remittances, which has helped strengthen the Indian economy. Furthermore, with more NRIs investing in the Indian market, there has been a boost in job creation and economic growth. This has also led to an increase in consumer spending, which has had a positive impact on various sectors of the economy. Conclusion:The introduction of lower tax deduction for NRI in India is a welcome step that has benefited not only NRIs but also the Indian economy. It has made it more attractive for NRIs to invest and return to the country, which has led to an increase in foreign investments and remittances. NRI Taxation Bharat provides specialized lower-tax deduction services to NRIs in India. With the government taking steps to make the tax system more equitable for NRIs, it is expected that more NRIs will be encouraged to contribute to the growth of the country.
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