The government on Tuesday tried to allay fears of NRIs being harassed by the income tax department due to the new Budget provision of compulsory declaration of foreign assets.“We will bother only those non- resident Indians (NRIs) who have unexplained funds. If any money is found to be of some person and then it comes to our knowledge and is legitimately explained, he doesn’t have to bother. But if it is unexplained, then we will have to bother and we will bother,” CBDT chairman Laxman Das said at an interactive session with members of the Federation of Indian Chambers of Commerce and Industry (FICCI).
Finance secretary R. S. Gujral said that there is no intention that NRIs should not return or should not bring back their assets to the country. “I do not think there is any doubt,” he remarked. “Obviously, if they have earned money and they are not required to file a return in India and they have assets abroad, they are not undisclosed assets,” he explained. However, Gujral said, “ If a person is employed as a clerk abroad and comes back after two years with $ 1 billion in his pocket, the person would have to explain the amount. But generally, it is very clear that India wants to attract NRI investment, NRI remittances and we welcome the NRIs even coming back.”Regarding reassessment of income in relation to any asset located outside India, the Budget has proposed reopening of assessments of up to 16 years compared with six years at present. Besides, it would be mandatory to reporting assets held abroad.
The time limit of six years is not sufficient in cases where assets are located outside India because gathering information regarding such assets takes much more time on account of additional procedures and laws of foreign jurisdictions, the Budget Memorandum states.
The 16- year thing is an enabling provision where it is found that the person, whether NRI or anybody else, is not able to explain as to how he acquired the money and whether tax has been paid on it, whether in India or abroad. It is never the government’s purpose to trouble people who are explaining money held abroad, Das added.
Experts said that such a move could create unnecessary reporting requirements and harassment for NRIs who have returned to India after staying abroad for long.
Finance secretary R. S. Gujral said that there is no intention that NRIs should not return or should not bring back their assets to the country. “I do not think there is any doubt,” he remarked. “Obviously, if they have earned money and they are not required to file a return in India and they have assets abroad, they are not undisclosed assets,” he explained. However, Gujral said, “ If a person is employed as a clerk abroad and comes back after two years with $ 1 billion in his pocket, the person would have to explain the amount. But generally, it is very clear that India wants to attract NRI investment, NRI remittances and we welcome the NRIs even coming back.”Regarding reassessment of income in relation to any asset located outside India, the Budget has proposed reopening of assessments of up to 16 years compared with six years at present. Besides, it would be mandatory to reporting assets held abroad.
The time limit of six years is not sufficient in cases where assets are located outside India because gathering information regarding such assets takes much more time on account of additional procedures and laws of foreign jurisdictions, the Budget Memorandum states.
The 16- year thing is an enabling provision where it is found that the person, whether NRI or anybody else, is not able to explain as to how he acquired the money and whether tax has been paid on it, whether in India or abroad. It is never the government’s purpose to trouble people who are explaining money held abroad, Das added.
Experts said that such a move could create unnecessary reporting requirements and harassment for NRIs who have returned to India after staying abroad for long.
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