If a non resident received a interest on fixed deposit amounting to Rs.12000. Is he liable to pay tax, if he has only interest income. If yes then what is the effective rate of tax.
thanx in advance
CA Dheeraj Bansal (Chartered Accountant) (652 Points)
18 June 2011If a non resident received a interest on fixed deposit amounting to Rs.12000. Is he liable to pay tax, if he has only interest income. If yes then what is the effective rate of tax.
thanx in advance
Shruthi
(PCC Student)
(111 Points)
Replied 18 June 2011
Assuming the Interest on Deposit received by the NON RESIDENT in India:
Whenever payment is made to NON RESIDENT irrespective of the Nature of Income, it will be covered under sec.195 only.
As per Sec.195, Interest on Deposit paid to Non Resident is subjected for the liability of Tax to be deducted by the payer irrespective of the amount so received.
But if the non resident submits form 15G or 15H, then such interest income is not liable for TDS.
Now the question to be posed on the Indian Banker side. No responsibility on his part to deduct TDS if he has got 15g or 15h from the Non resident.
But having not received any such form and still has not deducted TDS it is not the liability of Non resident but its the liability of the Indian banker.
Now say, banker has done his job right and deducted TDS, then the Non resident while filing return can claim refund of TDS as you said his only income is Interest income(12,000) and so it has not exceeded the basic limit.
Rate i'm not sure. it may be 10% i think (which comes in Sec.194 with respect to Interest other than Interest on security)
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