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The central government, on Saturday, made certain changes in the Income Tax Act redefining the non-resident status for Indian citizens for tax purposes. The rules for Indian citizens to claim NRI status have been tightened from staying 182 days abroad to 240 days now. As earlier, a person who stays aboard for more than 182 days had earned numerous tax reliefs in India. Especially, the amount earned aboard was not taxable in India. But according to Economic Times, the govt has amended the Section 6 of the Income Tax Act, and has now proposed that “notwithstanding anything contained in Clause (1), an individual— being a citizen of India— shall be deemed to be a resident in India in any previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of a similar nature.” In simpler terms, under the new rules, a person has to stay abroad for 240 days as opposed to the earlier stipulated period of 182 to be categorized as an NRI. Also, if an individual stay for more than 120 days in India, he’ll be considered as resident of India and will be taxed for the earnings abroad. Further, the new rule emphasizes that if a person is not a resident of any other country, then even if he stays for more than 240 days, he’ll be entitled to pay taxes in India for the foreign income.
The govt said it has tweaked the provisions for according the NRI tag to prevent people from taking advantage of loopholes in the country's taxation system. But it also asserted that the govt has no intention to tax global income of NRIs in India unless it is derived from an Indian business or profession.
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India is a vast country and a mystery to most. Those who live in it, those who now live outside of India or those who are just visiting. We, at NRIClub™, serve as a centralized hub of information for the residents, non-residents and travellers who are not familiar with various aspects of this great country.
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