Exemption u/s. 5(1)(xxxiii) of W.T. Act-Deposits from non-resident Indians - Income Tax - 411/1985

Exemption u/s. 5(1)(xxxiii) of W.T. Act-Deposits from non-resident Indians Circular No. 411 Dated 25/2/1985 The provisions of section 6 of the Wealth-tax Act, 1957, read with section 10(4A) of the Income-tax Act, 1961, allow exemption from wealth-tax on the moneys lying to the credit in a Non-resident (External) Account belonging to a person resident outside India within the meaning of section 2(q) of the Foreign Exchange Regulation Act, 1973. Section 5(1)(xxxiii) of the Wealth-tax Act provides that in the case of an assessee, being a person of Indian origin or a citizen of India who was ordinarily residing in a foreign country and who has returned to India with the intention of permanently residing in India, moneys and the value of assets brought by him into India and the value of the assets acquired by him out of such moneys are exempt from wealth-tax for a period of seven successive assessment years commencing with the assessment year next following the date on which such person returned to India. 2. A question has arisen as to whether the moneys deposited by a person of Indian origin or a citizen of India in a Non-resident (External) Account during the course of his residence in the foreign country will also be eligible for the deduction under section 5(1)(xxxiii) of the Wealth-tax Act, as stated above. 3. The moneys to the credit in a Non-resident (External) Account held by a person resident outside India as defined in the Foreign Exchange Regulation Act, 1973, are exempt from wealth-tax in India under s. 6 of the Wealth-tax Act, 1957. It is further clarified that it would also be exempt from wealth-tax under section 5(1)(xxxiii) of the Wealth-tax Act, 1957, for a period of seven successive assessment years after the return of an Indian citizen or a person of Indian origin, hitherto ordinarily residing in a foreign country with the intention of permanently residing in India. (Sd.) A.K. Fotedar, Under Secretary (W.T.) Central Board of Direct Taxes.