Is this true? I got the following from my TAX Consultant in India. I would like CDs to comment on the below article..

Dear Family & Friends,
Thought you may be interested in this in case you hadn't seen it before. Not sure what this means for those of us who have obtained or are considering getting OCI (Overseas Citizen of India) or PIO (Persons of Indian Origin) status with Govt. of India. I guess India is trying to follow the rules set by the USA distancing themselves from the former Rulers: Brits?
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5% TAX ON FOREIGN INCOME FOR NRI STARTING 2009 -2010

Government of India today announced imposition of a flat 5% tax on all NRIs over their world-wide income. Income that is already taxed in India has been kept out of the purview to avoid double taxation. No double taxation benefits would be available for this 5% tax, meaning even if you are paying tax on your income in a country with which India has double taxation agreement, the benefit would not be allowed against this 5% tax. All those Indians who are holding Indian Passports and have been out of the country for more than 180 days during the year are under this requirement. Income proof would have to be submitted in form of employer certificates, foreign tax filings etc.

Indian government is also coordinating with Australia, Europe, America, UAE and other countries on collecting Income data for its citizens as part of data sharing initiative on terror prevention measures. This has been hailed as bringing in compulsory participation in development of India from Non resident Indians. This means NRIs can no more just continue to retain their Indian citizenship without paying taxes in India. Though it may not be favorable in view of the NRIs who already bring substantial forex in form of remittances and Investments. This is bound to cause a lot of heart burn for the Indian community residing outside.

This is expected to generate ~10 Billion INR tax collection for the government in the year 2009-2010. For more information on this rule, tax filings and forms visit - Indian Government TAX website http://www.incometaxindia.gov.in " target="_blank">http://www.incometaxindia.gov.in

I don't see any such circular in IT dept website. Anything like this will be a headline for major newspapers. So I would think it is joke...

This is a fake news item. There is no such tax imposed by the Government of India. Refer to this link which shows that this is a hoax

http://www.qatarliving.com/answers/salary/5-tax-on-foreign-income-for-nri-starting-2009-10-whether-this-correct

This seems to be rumour circulating on various websites. I have gone through Income Tax India Website but havent found anything on the same suggesting imposition of 5% Income tax on Non Resident Indian (NRI) over their world-wide income w.e.f. A.Y. 2009-10.

Note: Please confirm this News from Your Own Sources as I havent found anything on any Governemnt Website syuggestin the above.