NRIs want liberalisation of insurance, pension and FDI regime
The overseas Indian have also made a strong case to withdraw the controversial FBT tax in the upcoming budget.india Updated: Feb 21, 2006 14:50 IST
Non-Resident Indians have made a strong case for withdrawing the controversial Fringe Benefit Tax in the upcoming budget, besides liberalising insurance, pension and the FDI regime especially in the retail sector.
When asked about their expectations from the coming budget, NRIs in several countries also demanded a single window system to attract investment from overseas.
"I expect the Finance Minister to heed to the industry plea and withdraw the Fringe Benefit Tax, which was the major irritant in an otherwise well received Budget a year ago," leading entrepreneur and Hinduja Group President GP Hinduja said.
United States India Business Council President Ron Somers said in Washington that the council will continue to press for opening up partially closed sectors and make the case for initial openings in areas that have been completely closed like professional services.
"Already we have seen one announcement in the opening of the retail sector. It has been extremely encouraging and we are hopeful that in the next few days we will see announcements regarding the opening of the insurance sector to 49 per cent. That was promised a year ago and we are waiting patiently," Somers said.
Calling for a one-point contact or a single window for processing projects in infrastructure, construction and other major areas, Consortium of Indian Industries in Malaysia Chairman Umang Sharma said, "Let there be a friendly and efficient approach. No investor wants to run from pillar to post looking for information in a foreign country."
NRIs not taxed in last Budget
In the budget for 2005-06, Finance Minister P Chidambaram extended tax exemption to non-resident (external) account and on bank interest payable to non-resident Indians (NRIs).
"Bowing to popular demand, I propose to continue the exemption from tax on interest earned on accounts maintained by NRIs," he told the Lok Sabha while presenting the budget.
Interest income accrued before March 31, 2005, on money deposited in an NR(E) account in any bank was exempted from income tax. Interest payable by a scheduled bank before April 1, 2005 to a non-resident or a person who is not ordinarily resident, on deposits in foreign currency, approved by RBI is also exempt from income tax.
As per the budget proposals, both these exemptions were available after April 1, 2005. These amendments would be in effect from April 1, 2006 and would apply in relation to the assessment year 2006-07 and subsequent years.
FM's Budget proposal had received appreciations from NRIs.
"It is heartening that the government has withdrawn the move to tax NRE deposits. Though the country was flush with foreign exchange and did not need NRE help unlike earlier days, the budget did take into consideration the interests of the NRIs", Ram Buxani, a prominent businessman, said.
"It is a joyous moment for the NRIs as the budget has removed the income tax on income from NRE deposits. This has been a demand of the NRIs ever since the previous budget sought to bring it under the tax bracket," Bharat Bhai Shah, former president of the Gujarati association, said.