CMA Intermediate · Direct and Indirect Taxation · Capital Gains
Under section 214 of the Income-tax Act, 2025, which statement about a non-resident Indian's income is correct?
For a non-resident Indian, section 214 taxes income from investment at 20% and long-term capital gains on specified asset at 12.5%. Only the remaining total income, after excluding these two, is taxed at rates in force.
- AIncome from investment is taxed at 12.5%
- BLong-term capital gains on specified asset are taxed at 20%
- CIncome from investment is taxed at 20% and long-term capital gains on specified asset at 12.5%Correct
- DAll income is taxed at rates in force
Explanation
Section 214 taxes an NRI's income from investment at 20% and long-term capital gains on specified asset at 12.5%. The rest of total income, after reducing these two, is taxed at rates in force. The options swapping the rates or taxing all income at rates in force are therefore wrong.
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