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NRI income from foriegn assets can't be taxed: SC RAKESH BHATNAGAR TIMES NEWS NETWORK[ MONDAY, MAY 31, 2004 06:06:45 PM ] NEW DELHI : Giving a major boost to the inflow of foreign exchange, the Supreme Court has ruled that the Indian revenue authorities can't tax NRIs on their income from properties abroad. It said the treaties for avoidance of double taxation between India and other countries will override provisions of Income Tax Act, thus the income derived by an NRI from his property in Malaysia is exempt from tax in India under the Indo-Malaysian treaty of 1977. This judgment may have a bearing on certain pending petitions challenging the Indo-Mauritius Double Taxation Avoidance Treaty. It has been alleged in those petitions that the Centre was losing huge amounts in tax as many companies were operating in India after registering in Mauritius just for the purpose of avoiding payment of tax. While dismissing the Commissioner of Income Tax's appeal, a Bench of Chief Justice S Rajendra Babu and Justice G P Mathur said as the immovable property, from which the gain was derived, was situated in Malaysia , the tax laws of India would not apply to the said income. "Taxation policy is within the power of the government and Section 90 of the Income Tax Act enables the government to formulate its policy through treaties entered into by it and even such treaty treats the fiscal domicile in one or the other and thus prevails over the provisions of the IT Act," Justice Babu, who retired on Monday said. Section 90 says "Where the Central government has entered into an agreement with the government of any other country for granting relief of tax, or for avoidance of double taxation, then in relation to the assessee to whom such agreement applies, the provisions of the Act shall apply to the extent they are beneficial to that assessee." http://timesofindia.indiatimes.com/articleshow/710977.cms |
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June01, 2004 - [India Thinkers Net]Gandhi's birthplace is politically irrelevant >> |
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