NRIs plea to retain tax benefits

HINDU BUSINESS LINE

Vimala Vasan



ABU DHABI, April 27

NON-RESIDENT Indians in the UAE have sent a representation to the Finance Minister, Mr Jaswant Singh, to retain the present tax benefits for returning NRIs and not abolish the non-ordinarily resident (NOR) status.

The UAE-based Pravasi Bandhu Welfare Trust has in the letter to the Minister said that NRIs had been confident that the Government had a stable NRI policy, but recent developments indicated that plans were under way to reduce the tax holiday for returning NRIs from the present nine years to two years, Mr K. V.Shamsudheen, Chairman of the Trust, told Business Line.

The representation by the Trust stated: "The total remittance of $10 billion in 2001 by Indians abroad is only the second largest source of foreign exchange for India; it is less volatile than the leading source of foreign direct investments. To earn a profit of this magnitude from exports, a number of subsidies are to be given to the exporters," the representation said.

It pointed out that remittance from NRIs had been growing steadily thanks to the increasing number of expatriates both skilled and unskilled. As per the data released by the Reserve Bank of India, the country's foreign currency reserves rose to $75.75 billion due to robust remittances from NRIs, the Trust said.

He said that reports in India indicated that the Finance Ministry was likely to retain the provision in the Finance Bill to tax incomes of foreigners and NRIs after they had resided in India for two years. These proposals were expected to be endorsed next week, according to the reports, he said.