Finance Minister Nirmala Sitharaman said that the Centre has no intention of levying an on the global income of NRIs and only that income which is generated in India will be taxable.
After the Budget on Saturday, there was confusion about the tax liability of Non-Resident Indians (NRIs) on their global income. The Finance Bill, 2020 has proposed that an Indian citizen shall deem. Also, to a resident in India if he not liable to tax in any country or jurisdiction. This an anti-abuse provision since it is noticed that some Indian citizens shift their stay in low. However, or no tax jurisdiction to avoid payment of tax in India, the finance ministry said in a statement.
Finance Minister Nirmala Sitharaman said that the Centre has no intention of levying a tax on the global income of NRIs
“What we are doing now that the income of an NRI generated in India will tax here. If he’s earning something in a jurisdiction where there is no tax, why will I include that into mine that has been generated there?” Sitharaman said.
“If you have property here and you get to rent out of it, but because you are living there, you carry this rent into your income there and pay no tax there, pay no tax here … since the property is in India, I have got a sovereign right to tax it,” the finance minister said in a post Budget interaction with reporters.
“I am not taxing what you’re earning in Dubai but that property which is giving you rent here, you may be an NRI, you may be living there but that is revenue being generated here for you. So that the issue,” she added.
New provision not intended to include in the tax net those Indian citizens who are bonafide workers in other countries
“The new provision not intended to include in the tax net. However, those Indian citizens who are bonafide workers in other countries. In some sections of the media, the new provision interpreted to create an impression. However, those Indians who are bonafide workers in other countries. Also, including the Middle East, and who are not liable to tax in these countries. However, it will tax in India on the income that they have earned there. This interpretation not correct,” the statement said.
In an attempt to avoid any confusion, it clarified that in the case of an Indian citizen who becomes a deemed resident of India under this proposed provision. Also, income earned outside India by him shall not taxed in the country. However, unless it derived from an Indian business or profession, the statement read.
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