No tax in India on NRI overseas earnings: Sitaraman

New delhi date. February 2, 2020, Sunday

The central government on Sunday disclosed the budgetary provision for non-resident Indians (NRIs) to pay taxes in India on foreign earnings.

The government made it clear that taxes on India's earnings from NRIs are not taxed in India. However, an Indian company has to pay tax only if the NRI earns it through a wealthy person. If necessary, relevant provisions of the law will include necessary clarifications.

It is proposed in the Money Bill 2020 that an Indian citizen who is not liable to pay taxes in any country's jurisdiction will be considered to be living in India. This is an Anti Abuse Provision.

Because it has come to the notice of the government that some Indian nationals are shifting their residence in low-income tax-free areas to avoid paying taxes in India.

The government has made this specification after the Finance Bill 2020 proposal. According to the proposal, every Indian citizen who is not eligible to pay tax in any other country due to his travel or residence, will be considered as a tourist Indian and the income he earns abroad will be taxable in India.

The new provision, according to the government's announcement, is not intended to bring taxpayers Indian citizens working legally in other countries. The illusion that the provision was made to levy tax in India on the earnings of actual workers working in other countries, including the Middle East, who were not liable to pay taxes in these countries. However, such a definition of this new provision is flawed.