As we have discuss in the previous blog taxation of NRI in India. Today we are discussing on TDS ON INCOME EARNED BY NRI IN INDIA.Every Non Resident Indian has to pay the taxes in India on income earned in India.
TDS on Interest Income earned by NRI in India
Interest income earned on Non Resident External (NRE) accounts and Foreign Currency Non Resident (FCNR) are exempt from income tax hence no TDS will be deducted. TDS will be deducted @ 30 % on Interest income of Non Resident Ordinary Account (NRO).
TDS will be deducted @ 20% on Interest Income from bonds and corporate deposit.
TDS on Dividend Income earned by NRI in India
Dividend Income from equity share, Equity Mutual fund, Debt Mutual Fund are exempt from Income tax. Hence no TDS will be deducted.
TDS on Capital Gain Income earned by NRI in India
Equity share/ Equity oriented mutual fund (Equity oriented mutual fund are those who considered more than 50% equity) – If sale of the same after 365 days it will be Long term capital gain (LTCG) and exempt from income tax hence no TDS will be deducted. If sale of the same within 365 days it will be short term capital gain STCG and exempt from income tax hence TDS will be deducted @ 15 percent.
Debt mutual funds, corporate debentures – If sale of the same after 365 days it will be long term capital gain (LTCG), TDS @ 10 % will be deducted. If sale of the same within 365 days it will be short term capital gain STCG TDS will be deducted @ 30 %.
Capital gains on any other assets described above like house property, gold – TDS will be deducted @ 30 %.
