Charity Implores Indian Government Not To Tax NRI Deposit Accounts

by Lorys Charalambous, Tax-News.com, Cyprus

31 May 2004

A body representing the interests of Non-Resident Indians situated in the Gulf region is urging the government not to carry out its threat to tax income accruing from the deposit accounts of NRIs.

The Pravasi Bandhu Charitable Trust has written to Prime Minster Manmohan Singh and Finance Minister P Chidambaram, in addition to other Members of Parliament, protesting the proposal by a Reserve Bank of India panel to remove the tax exemption from NRI deposits now that foreign exchange levels are healthy.

“Seeing the current situation, the Reserve Bank of India is proposing to tax interest income on NRI deposits. The Trust appeals (to) the prime minister not to tax interest income on NRI deposits," stated the charity, pointing out that many NRIS in the Gulf region exist on low incomes.

"We hope the new government will not take such a step which will be a major drain on the hard earned savings of the NRIs from the Gulf," the letter added.

K V Shamsudheen, the chairman of the Trust, also requested that the government extend the benefits of Double Taxation Avoidance Agreements to NRIs living in the Gulf states of Oman, Qatar and the United Arab Emirates.

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