NRIs will now have to pay service tax for sending money home

Remitting money to dependents in India by non-resident Indians (NRIs) could attract a service tax beginning July 1, 2012. The service of transferring remittances into India have been brought under the service tax regime, and will attract 12.36 % tax. As proposed by The Union Government.

Experts say that this move is likely to push many NRIs to explore illegal channels to bring their dollars into the country.

Remittance flows intoIndiaamounted to $64 billion in 2011, compared with around $58 billion the previous year, according to World Bank’s Migration and Development report. Remittances are expected to be around $70 billion in 2012. According to the Reserve Bank of India data there are 30 million NRIs. Currently no other country imposes tax on remittances and India would be one of the first.

Experts also say that imposing tax on remittance is also unjust because a major share of the money is used to the daily needs of family members of the NRIs.

4 Responses to NRIs will now have to pay service tax for sending money home

  1. Sachin Chattopadhyay says:

    If I send money to my NRE account will it attract service tax?

  2. abc says:

    This is injustice which present govt. is doing to NRI’s , by imposing tax on remittence they will not be able to improve any situation rather it will be more worse as NRI’s will look for other ways to support their families, our govt is just trying to do things out of no where, by imposing tax on remittence in flow of foreign currency to india will reduce drastically and which in turn will effect country’s economy.

  3. ratan kumar says:

    heloo why it si so if we are sending the moeny from abroad to india for daytoady requiremenst of our family is there any fixed amount

  4. dev says:

    govt always sucks poor peoples..

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