Income Which Is Exempt From Tax For The NRI

  1. Interest on specified securities or bonds, including income by way of premium on the redemption of such bonds.
  2. Interest on NRE Account and FCNR accounts.
  3. Interest on Notified savings Certificates, subscribed in convertible foreign exchange, National Savings Certificates VI and VII issues have been notified for this purpose. (Notification No 50 653 (E), dated 8th September, 1982).
  4. However, sale of these Certificates have been discontinued from 1st April, 1989.
  5. Tax on salary income of a foreign technician, paid by the employer, such tax paid is not a perquisite in the hands of such technician.
  6. Remuneration, received by non-Indian citizen as employee of a foreign enterprise for service rendered in India.
  7. Salary, received by a non-resident, who is not a citizen of India, for services rendered in connection with his employment on a foreign ship provided that his total stay in India does not exceed 90 days in the previous year.
  8. Remuneration, received by an individual who is not a citizen of India as an employee of the Government of foreign state during his stay in India in connection with his training in any establishment / office/ undertaking, owned by the Government.
  9. Allowances or perquisites, paid or allowed as such outside India by the Government to its employee, who is a citizen of India, for rendering services outside India.
  10. Foreign income and remuneration, received by an individual who is assigned duties in India from Government of a foreign State for services, rendered in connection with co-operative technical assistance programmes and projects in accordance with an agreement, entered into by the Central Government and the Government of a foreign State.
  11. Foreign income and remuneration or fee, received by a consultant, being an individual, who is either not a citizen of India or being a citizen of India, is not ordinarily resident in India, or any other person, being a non-resident.
  12. Foreign income and remuneration, received by an individual who is an employee of the consultant, referred to in section 10(8A) and is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India.
  13. Foreign income of any member of family of person, referred to in section 10(8), 10(8A) and 10(8b).
  14. Interest on Non-resident (Non-repatriable) rupee deposit account (NRNR) (Notified by Central Government). The notification states that interest on NRNR deposits accruing to non-residents only would be exempt under section
  15. 10(15) of the Income Tax Act. Therefore, interest on NRNR account is not exempt from income tax when a person acquires the status of resident but not ordinary resident.
  16. Interest earned on Foreign Currency (Ordinary Non-repatriable Deposit account) FCNR. Under this section, any interest on deposits in foreign currency with a scheduled bank, if a scheme approved by the Reserve Bank of India is exempt. This exemption is also available to a person who is not ordinarily resident. Interest on Resident Foreign Currency (RFC) account is exempt till such time as NRI maintains the status of Not Ordinarily Resident.
  17. Interest on bonds, issued under the Gold Deposit Scheme, 1999.
  18. Income of European Economic Community derived in India by way of interest, dividends or capital gains from investment made out of its funds under notified scheme.
  19. Income of SAARC fund for Regional Projects, set up under the Colombo Declaration, issued on 21st December 1991.
  20. Any income from the following:
  21. Dividends, referred to in section 115-0; or
  22. Income, received in respect of unit from the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963); or
  23. Income, received in respect of the units of mutual funds specified under clause (23D).

Note:

This is exempt from tax from the assessment years 1998-99 to 2002-03 and the current assessment year 2004-05."

 

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