Zooming trade by NRIs fills income tax coffers in Gujarat

According to senior officials of the wing,the total revenue collection in 2007,the year international taxation wing was established,was a mere R50 crore. But the wing has already collected R410 crore by the third quarter of the fiscal 2011-12 against R320 crore for the same period in 2010-11.

International taxation covers the tax of NRIs and companies or those who fall under Double Taxation Avoidance Agreement (DTAA). India has DTAA with more than 12 dozen countries.

According to domestic income tax laws,the NRIs or foreign-based firms that have permanent set-up in the country and are generating profits on Indian soil are liable to pay taxes despite DTAA. In case of individuals (NRIs),if a person stays for 182 days or more,he or she becomes a resident of India and tax is levied on his global income.

In 2007,the international taxation wing was established in Ahmedabad to look into the rising number of NRIs and foreign firms setting up in the state. Officials said although the wing is new and awareness is quite less,it has achieved the desired results,which shows the graph of tax collections as well.

In fact,in the previous financial year,the number of assessees was 1,260,which has increased to 1,600 in the current fiscal. In 2010,the wing collected around R450 crore as tax,which was a little over its target. For 2011-12,the department has a collection target of R510 crore.

“The number of NRIs doing business transactions in Gujarat has definitely seen a surge. They are mostly investing in real estate. The increasing number of our assessees indicates this,” said a senior official.