NRI's CORNER
F.E.M.A.
Shri Arun Jaitley ,
Honorable Finance Minister,

Government of India,

New Delhi
 

Respected Shri Jaitley ,

Good wishes.

1. The Income Tax Return Form No 2  has recently been modified requiring a Non  Resident to declare his overseas bank accounts.
.02  This change is made in Part B - TTI , para 14 (II) which requires details of Bank accounts held outside India by Non Residents.

2. Under Section 139 of Income Tax Act, 1961 (IT Act) a Person who is a Resident i.e. Resident & Ordinarily Resident (R & OR) is required to disclose foreign accounts and assets under Schedule Foreign Assets (FA)
.02  This Section does not apply to an Individual who is defined as Resident but Not Ordinarily Resident (R but NOR) and  Non Resident.

3. Even clause  48 to 50 under Chapter V of THE BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX BILL, 2015,  also prescribes that If a person, being a Resident other than ordinarily resident in India wilfully fails to furnish any information relating to an asset (including financial interest in any entity) located outside India, held by him, as a beneficial owner or otherwise or in which he was a beneficiary shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine.

4. As per section 5 r.t.w. section 9 of Income Tax Act , 1961, in case of Non Resident only income accrued or deemed to be accrued in India or received in India only is taxable. Hence he is not required to disclosed his foreign income in India.

5. And legally and technically also Income Tax Return cannot seek any information which is not provided for in the Act. So strictly speaking ITR rules cannot seek any information which is not provided for in any Section of Income Tax Law. Also instruction for filing of return provided does not mention that Non Resident is required to j Foreign Bank Accounts in ITR 2.

6. As a Non resident is not required to disclose Overseas income and Overseas    assets. This part of tax return seeking all foreign accounts by Non Residents seems to be a drafting error.

7. It seems that the Draftman has made a mistake while drafting this Income Tax Return but this small mistake has created a serious panic and utter confusion amongst NRIs across UAE and the whole World without any purpose and gain to any Party.

I sincerely request You to look into the same and do the needful for appropriate corrections at the earliest and cancel this change as this cancellation will not only restore the original Tax Return but will also restore the confidence and peace amongst  the entire NRI community.


Thanking You in anticipation.

Sincerely ,

RAJESH H DHRUVA
Chief Executive
femaonline.com
USA : 832.324.9944  India : (91) 982.404.9944

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THE BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX BILL, 2015

WE ARE HAPPY THAT FINANCE MINISTRY HAS ISSUED A CIRCULAR CLARIFYING THE MATTER THAT THIS INFORMATION OF OVERSEAS BANK ACCOUNT IS TO BE PROVIDED ONLY BY FOREIGN COMPANIES OR NON RESIDENTS WHO DO NOT HAVE INDIAN ACCOUNTS AND ARE ELIGIBLE FOR CLAIMING INCOME TAX REFUND.


CHAPTER V  -  OFFENCES AND PROSECUTIONS

48. (1) The provisions of this Chapter shall be in addition to, and not in derogation of, the provisions of any other law providing for prosecution for offences there under.
(2) The provisions of this Chapter shall be independent of any order under this Act that may be made, or has not been made, on any person and it shall be no defence that the order has not been made on account of time limitation or for any other reason.

49. If a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, who at any time during the previous year, held any asset (including financial interest in any entity) located outside India as a beneficial owner or otherwise, or was a beneficiary of such asset or had income from a source outside India and wilfully fails to furnish in due time the return of income which he is required to furnish under sub-section (1) of section 139 of that Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine : Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of income under sub-section (1) of section 139 of the Income Tax Act if the return is furnished by him before the expiry of the assessment year.

50. If any person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, who has furnished the return of income for any previous year under sub-section (1) or sub-section (4) or sub-section (5) of section 139 of that Act, wilfully fails to furnish in such return any information relating to an asset (including financial interest in any entity) located outside India, held by him, as a beneficial owner or otherwise or in which he was a beneficiary, at any time during such previous year, or disclose any income from a source outside India, he shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine.

alttag