A very important privilege is granted to a non-resident Indian who has income from foreign exchange assets only. Thus, it is provided in Section -115G that a non-resident Indian is not required by Section 139(1) to file an income tax return, if both the conditions as given below are fulfilled, namely:
his total income in respect of which he is assessable under the Income Tax Act during the previous year consisted only of investment income or income by way of long-term capital gains or both; and
the tax deductible at source under the provisions of Chapter XVII has been deducted from such income.
Thus, it is clear that where the requisite income tax is deducted at source from the income of a non-resident Indian and he has only investment income or long-term capital gains relating to foreign exchange assets, he is not required to furnish any income tax return.