Rates of Direct Tax Affecting NRIs

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The following are the direct tax rates which affect the NRIs.

INCOME TAX

The basic limit and the income tax rates for assessment year 2000-2001 relevant to Financial Year 1999-2000 are as under :-

Status
Income (Rs.)
Tax Rate %
For Individuals, HUFS, Trusts, AOPs. etc
50,000/-
NIL
50,000/- – 60,000/-
10
60,000/- – 150,000/-
20
Above 150,000/-
30

2. Partnership firms and domestic companies Re. 1 onwards, 35%

3. Other than domestic company Re. 1 onwards, 48% (Foreign Companies)

4. Royalty and technical fees are liable at a concessional rate of 30% and 20% respectively.

WEALTH TAX

Under the Wealth Tax Act, 1957, Individuals, HUFs and Companies pay wealth tax. Individuals will include residents as well as non-residents. In the case of individuals, HUFs and certain companies, Wealth Tax is payable at 1 % on the net wealth exceeding Rs. 1.5 Million as on valuation date which is the last date of the previous year i.e. 31st March. Net wealth is arrived at after various deductions, exemption and liabilities as on the valuation date.

GIFT TAX

Under the Gift Tax Act, 1958, gift tax was payable by the donor upto 30th September, 1998. The Gift Tax Act has been repealed with effect from 1st October, 1998 and therefore the Gift Tax is not chargeable for the gifts made on or after 1st October, 1998.

The gift can therefore be freely given by NRIs to residents, but they must be genuine and by an NRI who has capacity to give such gifts.

ESTATE DUTY

Estate duty was payable on the estate of a persons who have died on or before 15th March, 1985. The Estate Duty Act has been repealed and therefore there is no estate duty from the said date.

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