New Delhi: The nation’s Revenue Secretary, Ajay Bhushan Pandey, on Saturday mentioned an Indian now has to keep overseas for 240 days, as in opposition to the 182 beforehand, to be categorised as a non-resident. In different phrases, an Indian nationwide who needs to declare the non-resident standing can’t keep in the nation for 120 days, or extra, in a yr.
Pandey’s assertion got here at a press briefing on Saturday after Finance Minister Nirmala Sitharaman offered the Union Budget in Parliament.
“We have 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,” mentioned Pandey. “Now, in order to become a non-resident, he has to stay out of the country for 240 days.”
The second rule is extra pertinent: a non-resident Indian who will not be taxed in the international nation the place he/she lives might be taxed in India.
“If any Indian citizen is not a resident of any country in the world, he will be deemed to be a resident of India and his worldwide income will be taxed,” mentioned Pandey.
“It’s a very big disadvantage for Indians residing overseas only to save on tax,” mentioned Dinesh Kanabar of Dhruva Advisors. He expects that many Indians dwell overseas in nations, such as Dubai, the place the revenue tax is low or nil. Now they are going to be taxed in India in the event that they fall in the revenue tax bracket.
For Indians, Sitharaman revised revenue tax charges and proposed new tax labs.
The new charges will, nevertheless, not enable exemptions beneath Section 80C. Home mortgage exemption, insurance coverage exemptions and the usual deduction can even not keep beneath the proposed regime.
“The new tax regime will be optional and the taxpayers will be given the choice to either remain in the old regime with exemptions and deductions or opt for the new reduced tax rate without those exemptions,” Sitharaman mentioned when unveiling the Budget.
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