The provisions of Chapter XII-A, namely, levy of a uniform rate of income tax of 20% on the investment income of a non-resident Indian, etc. are not compulsory in the case of every non-resident Indian. Rather, Section 115-I provides that a non-resident Indian may elect not to be governed by the provisions in this chapter in any financial year. He may do so when he finds that the normal rates of income tax would mean a lower income tax liability than the uniform rate of 20%. Such a case would exist there when the total income for A.Y. 2010-2011 is upto Rs. 9,60,000. The average rate of income tax on such an income would be about 20%. Hence a non-resident Indian with an income of less than Rs. 9,60,000 would certainly like to be assessed by the normal procedure and according to the normal rates of income tax. In such a case he has to furnish to the Assessing Officer a return of income for the relevant year declaring that the provisions of Chapter XII-A would not be applicable to him for that assessment year. When the nonresident does such a thing for any assessment year the provisions of Chapter X11-A would not apply to him for that assessment year and his total income for that assessment year would be computed and tax on such total income would be charged in accordance with the other provisions of the Income Tax Act. |
