Govt clarifies on Budget proposal to tax NRIs in India

New Delhi: The government on Sunday clarified that the proposed tax on non-resident Indians (NRIs) will not apply on bona fide Indians working in tax-free foreign countries and is intended to tax only those seeking to escape tax by exploiting their non-resident status.

Finance Minister Nirmala Sitharaman in her Budget for 2020-21 had proposed to tax NRIs, who do not pay taxes in any foreign country.

This provision raised anxiety in minds of those working in the Gulf region where countries do not tax income earned by individuals.

First Sitharaman clarified that only Indian income of NRIs is proposed to be taxed under the new provision, and later the tax department issued a statement to say that “the new provision is not intended to include in tax net those Indian citizens who are bona fide workers in

other countries.”

The Union Budget for 2020-21 presented on Saturday had tightened the screws on those seeking to escape tax by exploiting their non-resident status.