New Delhi: Non-resident Indians not paying taxes in any foreign country will now be taxed in India, the Union Budget for 2020-21 has proposed.
At present, if an Indian or a person of Indian origin managed his stay in India such that he remained a non-resident in perpetuity, he was not liable to pay tax on his global income in India. The Union Budget 2020 has now proposed to introduce a deeming provision that every Indian citizen who is not liable to tax in any other country, by virtue of his domicile or residence, shall be deemed as a resident of India. Consequently, his global income would be taxable in India.
Tightening the residency provisions, the Budget also proposed to reduce the period of stay in India to 120 days from 182 days earlier for persons of Indian origin (PIOs) to be categorised as non-resident Indians (NRIs).
Amending Section 6 of the I-T Act, the Budget proposed that “Notwithstanding anything contained in clause (1), an individual, being a citizen of India, shall be deemed to be 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 similar nature”.