Singapore: Non-Resident Indian (NRI) industrialists here have expressed apprehensions about the proposed Direct Tax Code, which may tax their properties and foreign currency deposits in India.
"Such new taxes will discourage NRI's participation in the Indian economy," said R Narayanamohan, Chairman, Singapore Indian Chamber of Commerce and Industry (SICCI) after addressing a seminar on India's Union Budget 2012-2013 here.
Though the new tax code awaits legislative approvals and passages, there has been a wide-spread concern about its impacts on properties owned by NRIs who return to India for short stays and then lock the premises without renting.
Narayanamohan said he understood DTC proposals include taxing such un-occupied properties based on notional rental rates.
The other concern was the taxing interests earned by NRIs from foreign currency non-resident external (NRE) deposits, he pointed out.
"I hope the relevant tax authority will reconsider decision on imposing such taxes on NRIs," said Narayanamohan, adding that NRIs interests in India would wane if such taxes impacted their earnings and properties.
"In fact, India should be more flexible to NRIs, who are one of the main sources of drawing investments into the country," he stressed.
Reflecting the general sentiments of NRIs in Singapore and globally, Mr Narayanamohan called for the introduction of the current account under the NRE deposits of US dollar, British pound, Japanese yen and other foreign currencies.
Such accounts were allowed in developed economies and it should be considered by progressive India, which has emerged as one of the fastest growing economies in the world.
"Introduction of flexible banking accounts will definitely see an increase in the inflow of NRIs funds into India," he said.