Saturday, Mar 17, 2012

Gulf News

Dubai India’s federal budget did not have anything specific for non-resident Indians (NRIs). However, the deferring of the Direct Tax Code (DTC) is widely viewed as a relief.

Ahead of the budget, the biggest worry of NRIs centred around the DTC that was scheduled to take effect on April 1. The code proposes to change the basic definition of NRI for tax purposes. According to the new definition, NRIs present in India for more than 59 days in a financial year will be treated as residents.

Although the finance minister said yesterday that the government will work towards the implementation of DTC, he did not specify a timeframe or any amendments to the original DTC proposal against which a number of NRI representations were made.

“NRIs should be happy that the DTC bill restricting the stay of NRIs has not been introduced this year also,” said Ram Buxani, a Dubai businessman.

“Deferment of DTC till 2013 is welcome news for NRIs, but it should not come in its current form even next year,” said Navin Kapoor, managing director of Xpertize United. Although NRIs did not receive any direct incentive in the budget, Gulf-based investors said the tax exemption for small investors will encourage NRIs to invest in Indian equity markets. “I appreciate the finance minister for supporting capital markets directly by introducing the Rajiv Gandhi Equity scheme and tax exemption for small investors,” said K.V. Shams Al Deen, director of Barjeel Geojit Securities.

Import duty on gold up

Prominent NRIs welcomed the boost to the infrastructure sector but said the higher import duty on gold could result in increased smuggling.

“It’s interesting to note that the FM has increased the import duty on gold from 2 per cent to 4 per cent. One cannot increase the import duty of gold beyond a certain percentage as it may result in smuggling,” said James Mathew, managing director of Horwath Mak.

“The increase in the customs duty exemption on the baggage allowance from Rs25,000 (Dh1,786) to Rs35,000 is a welcome move,” said Nagaraj N., manager, Abu Dhabi Commercial Bank. But the budget did not have anything else that benefited NRIs, he said.

By Babu Das Augustine?Deputy Business Editor

Gulf News 2012. All rights reserved.