Investment Income arising out of specified foreign exchange assets, being shares of an Indian company, debentures or deposits of an Indian public company and Central Government securities subscribed through foreign currency remittances or out of NRE / FCNR / A/cs.

The benefit of concessional tax @20% can be continued to be enjoyed by an NRG, even after he becomes a resident upon his return to India for settlement, in respect of his investment income in debentures and  deposits of public companies and Central Government securities, until the relevant asset is transferred or converted into money. Long term capital gains attract a flat rate of tax at only 10%.

NRG GIFTS EXEMPT FROM GIFT TAX :
 

The following gifts made by an NRG upto 30-9-1998 enjoy absolute exemption from Gift Tax under Indian Gift Tax Act :

Gifts by way of foreign currency remittances or gifts out of NRE/FCNR A/cs in India, made to any person.

Gifts made to any relative, of any shares, debentures or deposits of public companies and Central Government securities invested through foreign currency remittances or out of NRE/FCNR A/cs in India. For this purpose 'relative' would mean husband, wife, brother, sister or any lineal ascendant or descendant of the NRG.

Gifts made once out of the NRG A/c to any person.

Gifts of SBI Dollars Bonds or India Development Bonds made to any person. This exemption can be availed of even after the NRG becomes a resident. With effect from 1/10/1998, all Gifts either by residents or non-residents are tax free, since the Gift Tax Act have been repealed.

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