Union Finance Minister Nirmala Sitharaman and MoS Anurag Thakur hold the folder containing the Union Budget documents, in New Delhi on February 1, 2020.
| Photo Credit: R.V. Moorthy
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Clarification follows letter from Kerala Chief Minister over impact on workers in West Asia.
Union Finance Minister Nirmala Sitharaman on Sunday scotched fears that provisions introduced in the Budget would bring Indian workers’ income in zero tax jurisdictions, like the UAE, into the Indian tax net.
The Finance Bill has proposed three major changes to prevent tax abuse by citizens that don’t pay taxes anywhere in the world — reducing the number of days that an Indian citizen can be granted non-resident status for tax purposes from 182 to 120; citizens who don’t pay taxes anywhere will be deemed to be a resident; and the definition of ‘not ordinarily resident’ has been tightened.
“Let’s say an NRI, living in Dubai or elsewhere, is not taxed for his income there, but has some earnings through something in India for which he doesn’t pay tax here. We are saying, for that income which is generated in India, pay a tax,” Ms. Sitharaman said.
Alarmed