Finance Minister Smt Nirmala Sitharaman presented India\u2019s Annual Budget on July 23, 2024. Various tax-related and other proposals were made in this budget. Below is the summary of the Budget 2024 proposal impacting Non-Resident Indians \u2018NRI\u2019 (Indian Citizens living\/working abroad), Foreign Citizen (PIOs, OCIs, Others), Seafarers, and Expatriates.<\/p>\n\n\n\n
In this budget, there is no change in the tax slab rates of the old regime. Changes in tax slab rates have been made in the new regime. A comparative chart of tax rates of FY 2023-24 (AY 2024-25) and FY 2024-25 (AY 2025-26) is given below.<\/p>\n\n\n\n
Comparison of Tax Rates under Old Tax Regime & New Tax Regime<\/strong><\/p>\n\n\n\n Budget 2024 has amended the taxation of capital gain taxation on long-term category property sale in India. In this budget, wef July 23, 2024 itself, tax rates on property sale is reduced to 12.50% (from erstwhile 20%). Though the tax rate on long-term capital gain is reduced, however, indexation benefit has been taken away from the long-term property capital gain tax calculation. Hence, in relation to long-term property capital gain taxation, taxation is simplified, i.e., Tax rate @12.50% (plus applicable surcharge & cess) and no indexation. To understand it more clearly, a comparative study is given in the table hereunder<\/p>\n\n\n\n One major change made in this budget is increase of tax rates on capital gains arising from the stock market. The proposed changes are as under:<\/p>\n\n\n\n Long-Term Capital Gains (LTCG) Tax:<\/strong> 12.5% (from erstwhile 10%) for gains from listed equity shares, mutual funds held for more than one year.<\/p>\n\n\n\n Short-Term Capital Gains (STCG) Tax:<\/strong> 20% (from erstwhile 15%) for gains from listed equity shares, mutual funds held for less than one year.<\/p>\n\n\n\n TDS Rates On Stocks, Mutual Funds Sale By NRIs: <\/strong>Accordingly, TDS rates are also changed on the sale of shares, mutual funds by Non-residents.<\/p>\n\n\n\n Budget Impact on NRIs: <\/strong>The above changes will increase the tax burden on NRIs. NRIs will have to more tax in India from their stock market profits. However, this tax will get set off against the tax liability they have to pay in their country of residence, i.e. where they are Tax Resident. Hence, if the tax rates are more in their Tax Resident country, then this budget impact will be nil as they can claim DTAA relief for Indian tax liability in their Tax Resident country.<\/p>\n\n\n\n The Government is planning to revamp the Income Tax Act within the next six months with the objective of simplifying the tax code. This step is aimed at reducing the complexity of tax filings by 20%. Once it is implemented, it will certainly benefit significantly to Non-residents (NRIs, OCIs) as they always look forward for simplified tax mechanism and the least litigation. The only requisite for non-residents is that they need to keep reporting their financial transactions, Non-resident status, and other needful to tax authorities on regular basis (through ITR and other applicable reporting).\u00a0\u00a0<\/p>\n\n\n\n With the significant increase in capital expenditure and the launch of new infrastructure projects including innovative city projects, the real estate investment opportunities look promising for NRIs. <\/p>\n\n\n\n Budget 2024 proposes to remove the penalty of Rs 10 lakh under section 42 and 43 of the Black Money Act if NRI fails to report any foreign assets (other than immovable property) where the aggregate value does not exceed Rs 20 lakh (increase from Rs 5 lakh). Earlier, this limit was Rs 5 Lakh. This amendment will be effective from October 1, 2024. Hence, Returning NRIs, who miss to report their foreign bank account reporting in Indian ITR, will be relieved to the extent the balance maintained in the foreign bank account is less than Rs 20 Lakh.<\/p>\n\n\n\n Further, this exemption from penal provisions also applies to incorrect or non-reporting of such foreign assets.<\/p>\n\n\n\n Budget 2024 related above provisions are NRIs, Non-Residents, OCIs specific. It can help NRIs, in relation to their various questions like:<\/p>\n\n\n\n\n
\n Old Regime<\/strong><\/td>\n New Regime<\/strong><\/td>\n <\/tr>\n \n Current Tax Slabs (FY 2023-24)<\/strong><\/td>\n Budget 2024 Proposed Tax Rates (FY 2024-25)<\/strong><\/td>\n Current Tax Slabs (FY 2023-24)<\/strong><\/td>\n Budget 2024 Proposed Tax Rates (FY 2024-25)<\/strong><\/td>\n <\/tr>\n \n Tax Slabs (FY 2023-24) (Rs)<\/td>\n Tax Rates<\/td>\n Tax Slabs (FY 2024-25) (Rs)<\/td>\n Tax Rates<\/td>\n Tax Slabs (FY 2023-24) (Rs)<\/td>\n Tax Rates<\/td>\n Tax Slabs (FY 2024-25) (Rs)<\/td>\n Tax Rates<\/td>\n <\/tr>\n \n <= 2.50 Lakh<\/td>\n Nil<\/td>\n <= 2.50 Lakh<\/td>\n Nil<\/td>\n <= 3 Lakh<\/td>\n Nil<\/td>\n <= 3 Lakh<\/td>\n Nil<\/td>\n <\/tr>\n \n 2.50 Lakh to 5 Lakh<\/td>\n 5%<\/td>\n 2.50 Lakh to 5 Lakh<\/td>\n 5%<\/td>\n 3 Lakh to 6 Lakh<\/td>\n 5%<\/td>\n 3 Lakh to 7 Lakh<\/td>\n 5%<\/td>\n <\/tr>\n \n 5 Lakh to 10 Lakh<\/td>\n 20%<\/td>\n 5 Lakh to 10 Lakh<\/td>\n 20%<\/td>\n 6 Lakh to 9 Lakh<\/td>\n 10%<\/td>\n 7 Lakh to 10 Lakh<\/td>\n 10%<\/td>\n <\/tr>\n \n >10\u00a0 Lakh<\/td>\n 30%<\/td>\n >10\u00a0 Lakh<\/td>\n 30%<\/td>\n 9 Lakh to 12 Lakh<\/td>\n 15%<\/td>\n 10 Lakh to 12 Lakh<\/td>\n 15%<\/td>\n <\/tr>\n \n <\/td>\n <\/td>\n <\/td>\n <\/td>\n 12 Lakh to 15 Lakh<\/td>\n 20%<\/td>\n 12 Lakh to 15 Lakh<\/td>\n 20%<\/td>\n <\/tr>\n \n <\/td>\n <\/td>\n <\/td>\n <\/td>\n >15 Lakh<\/td>\n 30%<\/td>\n >15 Lakh<\/td>\n 30%<\/td>\n <\/tr>\n<\/table>\n<\/div>\n<\/div>\n\n\n\n Analysis of New Slab Option<\/strong><\/h2>\n\n\n\n
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Changes in Tax Rates In Property Sale Transactions By Non-Residents (NRIs, OCIs, Other Non-Residents)<\/strong><\/h2>\n\n\n\n
Prior to Budget 2024<\/strong><\/td> Post Budget 2024 (FY 2024-25 onwards)<\/strong><\/td><\/tr> – LTCG on property taxed @20%
– Indexation benefit available<\/td>For transactions happened up to 22 July 2024 <\/strong>
– LTCG on property taxed @20%
– Indexation benefit available
For transactions happening 23 July, 2024 onwards <\/strong>
– LTCG on property @12.50%
– No indexation benefit available<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n<\/div>\n\n\n\nIncrease In Tax Rates on Capital Gains Arising On Shares, Mutual Funds<\/strong><\/h2>\n\n\n\n
Revamp of the Income Tax Act<\/strong><\/h3>\n\n\n\n
Real Estate Investment Prospects for NRIs<\/strong><\/strong><\/h3>\n\n\n\n
Revision in provisions of Black Money Act wrt Returning NRIs<\/strong><\/strong><\/h3>\n\n\n\n
Budget 2024 Usefulness For NRIs, Seafarers<\/strong><\/h2>\n\n\n\n
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NRI Tax, RBI Laws Services \u2013 Various Topics \u2013 By NRI Tax Service Consultants Company Team<\/strong><\/h2>\n\n\n\n
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Frequently Asked Questions \u2013 Budget 2024 Impact On NRIs, OCIs<\/strong><\/h2>\n\n\n