Interest income of non-resident Indians - Tax problems of non-resident Indians repatriated from Kuwait
Circular No. 604 was issued by the Central Board of Direct Taxes on 11 June 1991. Its subject is Interest income of non-resident Indians - Tax problems of non-resident Indians repatriated from Kuwait.
This grants an exemption or a relief under a provision that allows one. Read the conditions attached: an exemption notification is construed strictly, and a condition missed is the exemption lost.
Extends by three months the period for which returning Kuwait non-resident Indians keep the section 10(4)(ii) exemption on their non-resident external and foreign currency non-resident accounts. Circular No. 590 dated 30 January 1991 had given Indian nationals normally resident in Kuwait, forced back to India by the Iraqi invasion, the exemption in respect of such accounts maintained up to 31 March 1991. With hostilities over and the Reserve Bank permitting them to keep those accounts in India and their foreign currency accounts and assets abroad up to 30 June 1991, the Board clarifies that individuals normally resident in Kuwait who returned to India after 2 August 1990 are eligible for the exemption on such accounts maintained up to 30 June 1991.
The Reserve Bank of India relaxed the account-holding position to help Kuwait non-resident Indians go back, and the Board matched the tax exemption to that relaxation.
Interest income of non-resident Indians - Tax problems of non-resident Indians repatriated from Kuwait
1. By Circular No. 590, dated 30-1-1991 (see Clarification 1), Indian nationals normally resident in Kuwait who were forced to return to India because of the Iraqi invasion, were made eligible for exemption under section 10(4)(ii ) of the Income-tax Act in respect of their NRE/FCNR accounts maintained by them up to 31st March, 1991.
2. With the cessation of hostilities in the Gulf and with a view to facilitate the Kuwait NRIs to return to Kuwait, RBI has now decided to permit them to continue to maintain their NRE/FCNR accounts in banks in India and to maintain their foreign currency accounts and assets abroad for a further period up to 30th June, 1991.
3. Taking into account the abovementioned factors, it is clarified that individuals normally resident in Kuwait and returning to India after 2nd August, 1990 would now be eligible for exemption under section 10(4)(ii) of the Income-tax Act in respect of such accounts maintained up to 30th June, 1991.
Circular : No. 604, dated 11-6-1991.
In an assessment for the year in which interest on a non-resident external or foreign currency non-resident account of a returned Kuwait non-resident Indian was brought to tax.
Source: the Income Tax Department’s own published text — its page for this instrument.