MUSCAT: The Indian government has proposed to tax NRIs who are not paying tax anywhere in the world. The budget also proposes changes in the income tax law to make such individuals deemed tax residents of India. This could be a big blow to those Indians living in GCC countries like Oman, UAE and Saudi Arabia where they do not pay tax for their earnings.
According to the proposal, if an individual is not paying tax in the country where they are living, then such NRI taxpayers may be required to pay tax in India.
Explaining the new proposal, Indian revenue secretary Ajay Bhushan Pandey said: “We have seen that in many cases some people are residents of no country of the world. Any Indian citizen, if he is not a tax-resident of any other country in the world, then he would be deemed to be a resident of India and their income would be taxed.”
Reacting to this after it was announced, former minister and Indian Member of Parliment Dr. Shashi Tharoor said: “This proposal to tax those NRIs who aren’t paying tax abroad will badly affect Indian workers in the Gulf countries where there is no income-tax.”
The Indian finance ministry has also made amendments on the definition of Non Resident Indians (NRIs). The amendments stipulate 240 days, instead of 182 days, of overseas stay to be considered as an NRI and any Indian staying in India for 120 days or more will be considered as a resident and taxed.
Though the amendments will only be made if it passes through the Indian parliament, it has left expats in Oman shocked and confused. “The government needs to clarify whether Indian citizens who are residents and employee in the Gulf countries are covered or not. If this is true, it will be a jolt for all of us,” said Vignesh Shivam who is an engineer in Muscat.