Houston we have a problem: say Netizens as Budget 2020 proposes tax on non-taxpaying NRIs

Union Budget 2020 drew sharp reactions after a change in the Income Tax Act affecting non-resident Indians (NRIs) was proposed on February 1. Earlier, an Indian needed to stay at least 182 days abroad to be categorised as an NRI which has now been increased to 240 days. In another significant change, an NRI who is not taxed in the foreign country will now be taxed in India.

Revenue Secretary Ajay Bhushan Pandey said while addressing a press conference that some people stay in different countries for a certain number of days but are not residents of any one of those. “So 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,” said Pandey.

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Setback for NRIs

The change in the Income Tax Act is a huge setback for NRIs who stay abroad to save tax. Netizens took to Twitter express their displeasure over the proposed amendment and called it against the interest of seafarers.

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The decision regarding the income tax on NRIs is considered as a big disadvantage as many Indians stay overseas to save tax. If Indian citizens residing in such foreign countries will be taxed, they will prefer staying back in India, leading to a drop in property rates of those countries.

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