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Budget 2020: Some bitter pills for NRIs as tax proposals, NRI status
Economy

Budget 2020: Some bitter pills for NRIs as tax proposals, NRI status

Agency News

First time, NRIs may taste some The Union Budget 2020 will be a little more demanding for the non-resident Indian (NRI) this time. The two new rules proposed by the new Budget 2020 will be detrimental for many NRIs, especially those who live in Gulf.

The First rule is more deadly: a non-resident Indian, who is not taxed in the foreign country, will become taxable in India. That means, if any Indian citizen is not a resident of any country in the world, he'll be deemed to be a resident of India and his worldwide income will be taxed. Some experts say the new tax proposal will be a very big disadvantage for Indians residing overseas only to save on tax. The new proposal will be detrimental for NRIs who live in countries like the UAE where the income tax is low or nil. Now these NRIs will be taxed in India if they are in the income tax bracket.

The Second rule, In order to get a non-resident (NRI) status, an Indian now has to stay abroad for 240 days, against 182 previously. In other words, an Indian national, to claim the non-resident status, can’t stay in India for 120 days or more in a year.

Government has made some changes in Income Tax Act where if an Indian citizen stays out of the country for more than 182 days, he becomes NRI. In other words, according to the new budget in order to become non-resident, he has to stay out of the country for 240 days.