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.
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.
What?!! Indian citizens abroad not paying tax in those regimes are liable to tax here? So every indian in dubai pays tax here?? Is this really in the fine print?— Arun Panicker (@panix68) February 1, 2020
@AbdulganiSerang today's budget proposals are totally against seafarers interests. Unions need to bring the seafarers point of view and request for exemption for sailors. Increase in NRI days and no tax in other countries both need not be applicable to sailors.— Capt. V Harinath Rao (హరి) (हरी) (@vankalahrao) February 1, 2020
So if ur NRI n Indian citizen and don't pay tax in any other country now you'll have to pay tax in India. So now even NRIs are not secure to save their money. 😂😂😂😂 #Budget2020— Lord Voldemort (@Smart_Ladka) February 1, 2020
As an NRI i started investment in Indian markets to have divident income , since companies pay tax on profits it is supposed to be tax free for reciepient..its sad that in addition to corp tax , investors also has to pay tax on dividend— Nassar P V (@Nassarvappu) February 1, 2020
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.