ADVERTISEMENTs
-10”-x-5.png)
India Budget: Changes for Non-resident Indians, Foreign Investors
The government simplified NRI capital gains taxation and announced exemptions for investors who 'Make In India.'
India's Finance Minister Nirmala Sitharaman holds a folder as she leaves her office to present the annual budget in the parliament, in New Delhi, India, February 1, 2025. / REUTERS/Altaf Hussain
Indian Finance Minister Nirmala Sitharaman on Feb. 1 presented the Union Budget for 2025, including some tax revisions for non-resident Indians (NRIs) and incentives for foreign investors.
A major highlight of the budget was the tax cuts this year. For NRIs, the threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) is proposed to be increased from Rs.7 lakh ($8,400) to Rs.10 lakh ($12,000). Also, the delay for payment of TCS up to the due date of filing statement is proposed to be decriminalized.
These exemptions are particulary siignificant as India is the highest recipient of remittances by the diaspora, especially from the Gulf and the United States.
For NRIs, the budget also proposed aligning the long-term capital gains (LTCG) tax rates, including Foreign Institutional Investors (FIIs), with that of resident taxpayers on the transfer of capital assets."It is proposed to bring parity between the taxation of capital gains on transfer of capital assets between residents and non-residents being Foreign Institutional investors, on their income by way of long-term capital gains on transfer of securities," Sitharaman said in her Budget speech.
In order to encourage investment, the government also proposed setting up a presumptive taxation regime for foreign entities offering services to Indian companies establishing or operating electronics manufacturing facilities along with the introduction of a safe harbour for tax certainty for non-residents who store components for supply to specified electronics manufacturing units.
As per the new budget, foreign direct investment limit for the insurance sector will be raised from 74 to 100 per cent. This enhanced limit will be available for those companies which invest the entire premium in India. Additionally, to encourage foreign investment in the spirit of ‘first develop India’, the current model Bilateral investment Treaties (BIT) will be revamped and made more investor-friendly, the Union Finance Minister said adding that current guardrails and conditionalities associated with foreign investment will be reviewed and simplified.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
E Paper
ADVERTISEMENT
.jpg)
Video
.png)
.png)
.png)
Comments
Start the conversation
Become a member of New India Abroad to start commenting.
Sign Up Now
Already have an account? Login