Finance Minister Nirmala Sitharaman.
Credit: PTI photo
During the presentation of her ninth consecutive Union Budget, Nirmala Sitharaman on Sunday proposed to exempt Minimum Alternate Tax (MAT) for non-residents who pay tax on presumptive basis.
The move, according to Sitharaman, is to address practical issues of small taxpayers like students, young professionals, tech employees, relocated NRIs.
Under the proposal, one-time six month foreign asset disclosure scheme for taxpayers to disclose income or assets below a certain size will be introduced.
This scheme would be applicable for two categories of taxpayers, including those who did not disclose their overseas income or asset and those who disclosed their overseas income and/or paid due tax, but could not declare the asset acquired.
For the first category, the finance minister said, the limit of undisclosed income/asset is proposed to be up to Rs 1 crore.
"They need to pay 30 percent of Fair Market Value of asset or 30 percent of undisclosed income as tax and 30 percent as additional income tax in lieu of penalty and would thereby get immunity from prosecution," she said.
For the second category, asset value is proposed to be up to Rs 5 crore. "Here, immunity from both penalty and prosecution will be available with the payment of fee of Rs 1 lakh," she said.
Further, Sitharaman said Individual Persons Resident Outside India (PROI) will be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme.
"It is also proposed to increase the investment limit for an individual PROI under this scheme from 5 per cent to 10 per cent, with an overall investment limit for all individual PROIs to 24 per cent, from the current 10 per cent."