Sometimes a non-resident Indian may become resident in India in any subsequent year. Normally a resident is not entitled to the special tax concession under Chapter XII-A of the Income Tax Act relating to the assessment of the total income being investment income of foreign exchange assets at the 20% rate of income tax. But under the provisions of Section 115H, such a non-resident Indian who becomes a resident in respect of the total income of any subsequent year can also continue to be assessable to income tax at the special rate of 20% income tax on the investment income in future years as well. For this purpose he has to exercise his option. Where such a non-resident Indian becomes a resident in India in a subsequent year and wishes to avail himself of the special provisions of Chapter XII-A, he should furnish to the Assessing Officer a declaration in writing along with his return of income under Section 139 for the assessment year for which he is assessable to the effect that the provisions of Chapter XII-A would continue to apply to him in respect of the investment income from any foreign exchange asset. However, only the last four items of the specified assets, would enjoy this special concession. Thus, in respect of the income from investment in shares of a limited company a non-resident Indian will not get the privilege of this tax concession under Chapter XII-A when he becomes a resident. He would, however, be eligible to the tax concession in respect of the income from the investments from the assets of the four types mentioned in Section 115C(f)(ii)or (iii) or (iv) or (v). |
