NEWS
 

FM defers tax on interest on NR(E) deposits

August , 2004

Bowing to the demands of NRIs, Finance Minister P Chidambaram today deferred the Budget 2004-05 proposal of levying tax on interest income from Non-Resident (External) account to the next Budget.

Chidambaram clarified this to a query from V Radhakrishnan (CPI-M) during the passage of the Finance Bill in the Lok Sabha.

As the House was taking up clause by clause consideration of the Bill, Radhakrishnan wanted to know from the Minister what he had done about the widespread concern among NRIs on interest on their fixed deposits.

The member contended that many of common NRIs from Kerala settled in the Gulf Region had put their hard-earned money in fixed deposits in India. If the tax was not removed they would shift their deposits elsewhere.

Chidambaram said he had moved an amendment to the Finance Bill, deferring the tax proposal to 2005. In the meantime, a consensus would be worked out.

The newly-created Ministry for Non-Resident Indians had also made out a case for withdrawing the tax on the interest income.

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