Taxation of non residents

This query is : Resolved

Ashwath Shetty (Querist)
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17 July 2013 Dear Experts,

Facts of the Case
NRI based in South Africa came to India in December 2011 after 18 years of Service & as per the Section 6 he is an RNOR for the PY 2012-13, he holds NRO Account in India & receives interest income for which Tax Deducted at Source at the rate of 10 % as per DTAA agreement entered between India & South Africa. The Interest income earned is Say INR 12,50,000 he has eligible investments of INR 50,000 U/s 80 C of the IT Act of 1961.

My Query
1. Since he falls in 30% Tax bracket should he file the return in India & pay the excess Tax calculated as per income Tax Act. If yes, can he claim deductions Under chapter VI A while calculating his Tax Liability.

2. If NO, Is he Eligible to declare the income as exempt & Claim the refund since he has entered into a DTAA agreement?
Kindly help me to resolve the query

Regards,
Ashwath Shetty