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Taxing times ahead for NRIs in Oman
February 2, 2020 | 11:16 AM
by Times News Service
India's Finance Minister Nirmala Sitharaman. Photo: Wikimedia Commons.
 
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Update: No move by Indian government to levy income tax on NRIs

Muscat: India's budget announcement on Saturday will lead to tough times ahead for Non-Resident Indians (NRIs). Firstly, to enjoy the non-resident status, an Indian will have to now stay abroad for 240 days in a year rather than 182 in the past. What this means is that you can’t stay in India for 120 days or more in a year to be eligible for the NRI tag.

“We've made changes in the Income Tax Act where if an Indian citizen stays out of the country for more than 182 days, he becomes a non-resident,” Revenue Secretary Ajay Bhushan Pandey said.

The second rule states that any NRI who is not taxed abroad will be taxed in India. The government said that it is introducing this provision to prevent tax abuse. "Instances have come to notice where 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," he said.



Therefore, the government has decided that "an Indian citizen who is not liable to tax in any other country or territory shall be deemed to be resident in India". 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, according to tax experts.

They said that a person who is not a resident of any country or doesn't pay tax — and is abroad for more than 240 days to maintain the NRI status, will be considered a resident of India and his income will be taxed. “Many Indians stay in countries, where the income tax is low or zero such as the GCC. Now they will be taxed in India if they are in the income tax bracket,” said tax experts.



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