After some confusion prevailed for a day, the Indian Finance Ministry has clarified that non-resident Indians (NRIs) would be liable to pay tax only on income derived from business or profession in India.
Thank you for reading this post, don't forget to subscribe!Notably, the Union Budget had proposed on Saturday that NRIs had to pay up taxes on global earnings if they were not paying in any other jurisdiction or country, generating much debate. This is an anti-abuse provision amid growing instances of NRIs shifting their stay in low or no-tax jurisdiction to avoid tax payment in India, said the Ministry on Saturday.
Then Indian Finance Minister Nirmala Sitharaman clarified the confusion on Sunday, saying, “An NRI living in another country earns money there, which is not taxed there at all, but has some earnings through something in India and does not pay tax here either because he does not live here. What we are saying is this: for the income generated in India, pay a tax. If you have a property here that generates rental income, but because you live there, you carry this income there and pay tax neither there nor here.”
India’s Central Board of Direct Taxes also put out a clarification later informing, “The new provision is not intended to include in tax net those Indian citizens who are bonafide workers in other countries.’’ -TIN Bureau