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Representation to Finance Ministry & Financial Institutions  » Anomaly 01.04.2006

Anomaly 1.4.06

 
Dear Clients
Unfortunately, the press release quoting the Minister of State for Finance is a misnomer.
 
2. Replying to question in Rajya Sabha, the Hon'ble Minister of State for Finance has said that interest on NRE/FCNR Deposits will be liable to tax with effect from 01-04-2006. 
 
3. Technically, with effect from 01-04-2006 means Assessment Year 2006-07 relating to Financial Year 2004-05.
.02 Accordingly, A.Y. 2006-07 means Financial Year commencing from 01-04-2005.
.03 Therefore, there is no modification nor extension and as finalized in the Union Budget of
2004-05, interest on NRE/FCNR Deposits will be liable to income-tax with effect from 01-04-2005.