Describing Non-Resident Indians as a "national resource," a grouping of NRIs led by Hindujas has asked the government for tax parity with Foreign Institutional Investors on short-term gains in the stock market.
In a pre-budget memorandum to Finance Minister Pranab Mukherjee, the IndusInd International Federation (IIF) said selective benefits may be offered to NRIs enabling them to make India the hub for their global activities.
"NRIs are required to pay tax at the rate of 10 per cent on their short-term gains in the equity markets. However, short-term capital gains earned by Mauritius-based FIIs on Indian stock market transactions are tax exempt.
"The treatment of taxation on short-term capital gains needs to be on par for both FIIs and NRIs," said the IIF, the apex organisation of NRIs, headed by UK-based Hinduja Group Chairman S P Hinduja.
IIF's leading members include Ram Buxani from UAE, K Sital from Hong Kong, Nari Pohani from the US, Vashi T Purswani from Thailand and Kamal Fabiani from Spain.
It said several NRIs would like to make India their permanent home after retirement. "The Indian tax authorities should not tax the income derived from interest on their investments in savings and pension plans in foreign institutions and foreign countries," the IIF said.