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  Business   In Other News  02 Feb 2020  Non-taxpaying NRIs will be taxed as Indian residents

Non-taxpaying NRIs will be taxed as Indian residents

THE ASIAN AGE. | SANGEETHA G
Published : Feb 2, 2020, 5:43 am IST
Updated : Feb 2, 2020, 5:43 am IST

The Budget also proposed to reduce the period of stay in India to 120 days from 182 days earlier for PIOs to be categorised as NRIs.

This amendment will take effect from April 1, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years.
 This amendment will take effect from April 1, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years.

Chennai: The Budget proposed to tax non-resident Indians who are not paying taxes in any foreign country.

“An Indian citizen who is not liable to tax in any other country or territory shall be deemed to be resident in India,” the Budget said. As a result, he will be taxed in India for his global income.

This amendment will take effect from April 1, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. The issue of stateless persons has been bothering the tax world for quite some time. It is entirely possible for an individual to arrange his affairs in such a fashion that he is not liable to tax in any country or jurisdiction during a year. This arrangement is typically employed by high net worth individuals (HNWI) to avoid paying taxes to any country/ jurisdiction.

The Budget also proposed to reduce the period of stay in India to 120 days from 182 days earlier for PIOs to be categorised as NRIs.

“Instances have come to notice where period of 182 days specified in respect of an Indian citizen or person of Indian origin visiting India during the year, is being misused. Individuals, who are actually carrying out substantial economic activities from India, manage their period of stay in India, so as to remain a non-resident in perpetuity and not be required to declare their global income in India,” the Budget said.

“These changes in definition will deter people from coming to India and some can even think of giving up Indian citizenship,” said Transaction Square founder Girish Vanvari.

Meanwhile, some of the NRIs found that there was nothing much for them in the Budget. “It was silent about NRIs and many of the demands to benefit them were not considered, said Azad Moopen, founder of Aster DM Healthcare.

Tags: non-resident indians, union budget 2020