Sec 115H of Income Tax Act, 1961, provides special tax provisions for Non-Resident Indians (NRIs) who return to India and wish to continue benefiting from NRI-specific tax advantages on investments made while they were non-residents.
What is Sec 115h of Income Tax Act?
When an NRI invests in certain assets such as shares, securities, or deposits in Indian companies, they are entitled to concessional tax rates under Chapter XII-A of the Income Tax Act. Section 115H ensures that even after they return to India and become residents, they can still avail of these concessional tax rates for their investments.
To qualify for the benefits under Sec 115h of income tax act 1961:
The individual must have been an NRI in the past and have invested in assets like shares or debentures during their NRI status.
After becoming a resident again, the individual must provide the Income Tax Department with a declaration that they wish to continue being taxed under NRI provisions on the income earned from these investments.
The concessional tax rates will apply until the transfer or conversion of such investments, meaning they are valid until the NRI liquidates or exits the asset.
For instance, if an NRI had earned interest or capital gains on certain assets while living abroad, they could continue to enjoy favourable tax rates on such earnings after returning to India under Section 115H. Once the investment is sold or transferred, standard tax rates applicable to residents would apply.
Section 115H
of income tax act
helps easing their tax transition from NRI to resident status.
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What is Sec 115h of Income Tax Act?
priya
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2024-09-19T08:05:23+00:00 2024-09-19T08:05:24+00:00Comment
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