India govt rolls back NRI tax, restricts levy only on their income generated in India

Tuesday, March 24, 2020

In a big relief to the Non-Resident Indian community (including the large Indian diaspora working in low or nil tax Gulf region), the government has decided to restrict taxation only to the income generated by them from businesses in India, leaving their global income out of any levy. Moreover, taxes would need to be paid only on income of above Rs 15 lakhs.

The changes formed part of the amendments in the Finance Bill, 2020 proposed by Finance Minister in Parliament. The Lok Sabha passed the Finance Bill on Monday by voice vote without discussion.

The amendment ensures that an individual who is an Indian citizen, would be regarded as a deemed tax resident of India, only if his total income from Indian sources (including a foreign business controlled in India or profession set up in India) exceeds Rs 15 lakh. Such a person would be treated as a not-ordinarily resident and will be liable to tax in India only on his India-source income and not his global income.

Among the other changes introduced by Sitharaman in the Finance Bill includes a clarification that shareholders will have no tax liability if the company issuing the dividend has paid the DDT before April 1 but the shareholder received the dividend afterwards.

The budget proposal for taxing dividends in the hands of shareholders by abolishing the dividend distribution tax (DDT) has, however, been retained.

Further, the TDS rate on payment of dividend to non-resident and foreign company has been prescribed at 20 per cent. The Finance Bill earlier had not provided any specific rate of TDS in respect of payment of dividend to non-residents and foreign companies with the result such dividend would have fallen in residual clause of 40 per cent. The TDS rate of 10 per cent on dividend for resident is already prescribed in the Finance Bill.

Proposal to levy (tax collected at source) TCS on sale of goods is to continue despite huge paperwork and compliance obligations. However, exemption of such TCS in respect of Export Sales and also to sellers in respect of Import has been provided. But this provision along with TCS on foreign remittance will be applicable from October 1, 2020.

Moreover, the provision for tax to be deducted @2 per cent on withdrawal of cash from Bank, Co-opt Bank and Post Officer exceeding Rs. 1 crore in aggregate during the year has been amended. Now, in case of a person who has not filed the returns for preceding 3 years then tax will be deducted @2 per cent on withdrawal exceeding Rs 20 lakhs and @ 5 per cent on withdrawal exceeding Rs 1 crore. This provision will be applicable from July 1, 2020.

Government's budget proposal on NRIs had dented sentiments as this community is seen as a big investor in the development of the country. The budget not only changed the qualification criteria of NRIs mandating them a higher number of days stay overseas but also introduced a provision that would have made them liable for tax in India on their incomes generated outside the country.

In the Union Budget 2020-2021, the government proposed to spend Rs 30,42,230 crore in the next financial year, 12.7 per cent higher than the revised estimate of 2019-20. By passing the Bill, these financial proposals have been given effect.

The government has assumed a nominal Gross Domestic Product (GDP) growth rate of 10 per cent in 2020-21, versus the nominal growth estimate at 12 per cent for 2019-20. It expects that receipts will increase by 16.3 per cent to Rs 22,45,893 crore, owing to higher estimated revenue from divestment.

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Wednesday, March 25, 2020
All unrealistic has become realistic, all dishonest has become honest, all false has become true, all lies are right declared by themselves. If anybody will say something for justice, truth, reality and the welfare of whole humanity including the person who can not tolerate, blind followers will start ....
Because incompetent are bound to prove themselves competent irrespective of performance and knowledge in reality.

Tuesday, March 24, 2020
@SUN.... ur brain is opposite to your title..cannot understand that the whole economy and businesses started to suffer after the demonetization and the Gabbar Singh Tax (GST) from which India never recovered till put your moon in the right place before making your analysis.. till date the PM has not made 1 direct news conference with reporters face to face..he only hides behind Mann ki Baat and TV box... and everytime he appears at 8pm there is always some type of BANDH after..hahaha

Tuesday, March 24, 2020
MS ruined the economy. He created fiscal deficit due to which nation is suffering till date.

Tuesday, March 24, 2020
Kuwait doing Great, COVID-19 .... but dont compare rich to poor country, kuwait oil rich country,(its like compare ur self vs Amabni) india also trying his best to make safe their people, , dont think now economy think only how to surive.

Tuesday, March 24, 2020
Incapable FM.. No mercy on their citizens. Everybody crying for stopping GST for sometime or atleast reduce the percentage.. instead she is discussing something else. Please don''t compare the current FM with Dr.MS or Mr.PC which is insult to them.

Tuesday, March 24, 2020
The problem with India is its ever complaining people. Whatever anyone does - they will complain, stage strikes, talk shows what not............. Nobody can do anything good or bad in India.

You should try this in China and see what happens.

Tuesday, March 24, 2020
All Over World is crying for this COVID-19 Virus but Indian Ministers are worried about the taxes,shame on them,how come this political party can play. Im sure IIK wont appear my comments,we should salute for Kuwait Govt who is worried about there Citizens/Expats and even they planned to exempt the rents loan etc etc,Indian Govt should learn the humanity from Kuwait Govt,Indian Politics killed people in the name of CAA/NRC etc but no one raise the voice.I request to Indian Politics/Ministers etc to work for humanity not for religion or other craps.

Tuesday, March 24, 2020
TOTAL FAILURE as finance minister... no proper knowledge to lead such a huge and complex economy like India...can any Indian say she is even 50% of what Manmohan Singh was as finance minister ??? last few months BJP did not even want to accept the fact that Indian Economy is suffering and going downhill.. whatever it is we still have to thank Congress for keeping alive India''s economy and stock markets till 2015.. the present acche din are better spent only to drink TEA.. pun intended

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