Most of the Non Resident Indian(NRI), who come to India often are worried because of the Direct Tax Code. It's not a dark hole, there is always light at the other end of the tunnel.
As per the existing laws, an NRI is liable to pay taxes on his or her global income, if he or she stays in India for a period of more than 182 days in a financial year. But DTC (Direct Tax Code) proposes to shorten this duration to just 60 days.
In January the Finance ministry has clarified that NRI's don't have to worry. They have mentioned that even if an NRI stays in India for 60 days in a financial year, his status does not turn into Indian residents for taxation purposes immediately. As per the DTC proposal, an NRI will be deemed as resident only if he has also resided in India for 365 days or more in the preceding four financial years, together with 60 days in any of these fiscal years. “Only when the two criteria are met, an individual will be considered resident for taxation purposes”.
It was further clarified that even if an NRI becomes a resident in any financial year, his global income does not immediately become liable to tax in India. Global income would become taxable only if the person also stayed in India for nine out of 10 precedent years, or 730 days in the preceding seven years.
Hope with this clarification, NRI's will keep coming to India often.
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