Tax residency certificate for residents of kuwait
RAHUL SAGGI
(Querist) 19 April 2012
This query is : Resolved
Hi,
I am a resident of Kuwait and have been residing here for 5 years now. I have an NRO FD account with ICICI Bank.
Till now all was ok, but then all of a sudden, they are asking for a TRC from the local authorities here in Kuwait.
I checked with the local authorities here (Ministry) as well as with the Indian Embassy and they mentioned that Kuwait does not offer any such thing as the income tax rate here is 0%.
I communicated the same to ICICI, but they said that it is mandatory for the TRC.
Could you please advise,
RAHUL SAGGI
(Querist) 19 April 2012
I forgot to add, they are asking for the TRC in order for me to benefit from DTAA (TDS rate of 10% instead of 30.9%).
Please note - earlier I used to avail of the DTAA, as I had submitted my passport and residency copy, but now they are asking for a TRC, which is not issued in Kuwait at all.
Raj Kumar Makkad
(Expert) 19 April 2012
You can produce a certificate from the Ministry in Kuwait that no such certificate is issued in Kuwait. I think this certificate shall meet the requirement of the bank.
VARUN MAHAJAN
(Expert) 19 April 2012
as you are a resident of kuwait you are entitled to claim Double taxation relief and you can get the benefit only when you show your income derived from India Taxed or shown in return in Kuwait
C. P. CHUGH
(Expert) 19 April 2012
TRC or Tax Residency Certificate is new term introduced in Finance Bill 2012 which is required to establish you status either as Resident or Non-Resident or Not-ordinarily residents so that your income could be taxed as per Law. I feel the ICICI Bank has acted prematurily because the Finance Bill 2012 is yet to get PResident assent and has not been notified at Act. Once it is notified, i believe, all consulate or embassies of India in other countries may be authorised to issue such certificate or rules framed under the Income tax Rules may prescribe a format of such certificate. Let us wait till then.
RAHUL SAGGI
(Querist) 19 April 2012
Thanks for the reply all of you. ICICI Bank has repeatedly told me that I need to submit the TRC to claim DTAA at 10%, instead of the 30.9%.
When I asked the Ministry here or the Indian Embassy, they said that they don't know of any such thing and cannot issue a one off certificate.
I am now in a fix, because the FD is of a very large amount and attracting interest in lakhs per Annan. I would definitely not like to forfeit 30.9% of that.
RAHUL SAGGI
(Querist) 19 April 2012
On top of that, if I ask them to close the FD prematurely, they will charge 1%.
It's like a catch 22 situation. NRIs give us your money... We will see what we can do.
Shonee Kapoor
(Expert) 20 April 2012
If you are depositing money to avoid taxation in that country or as the returns are higher in India.
The interest is accrued in India, so deemed income in India, tax has to be paid on the same.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
