Indian Income Tax to ask NRIs to explain bloated income |
Ever since the Indian government has announced in its annual budget that NRIs income will not be taxed, there has been a lot of confusion and it is believed that The government`s press release issued a day after the Budget, assuring that “bona fide workers” will not be taxed on what they earn abroad is a veiled hint to other NRIs that have to justify their bloated overseas income. As the implications of the proposed law sink in, there is a creeping fear that from next year the income tax department will question NRIs on `unrealistic` overseas Earnings. Since a decade, particularly, after the passage of the Black Money Act in 2015, several Indians became NRI to generate fake overseas income such as trading profits, consultancy fee, and fat salaries to legitimise undisclosed funds stashed abroad. Such people will be in a spot as they may have to justify their income. The burden has now shifted to assessees to prove that they earned abroad as `bona fide workers`. According to the Finance Bill 2020, any Indian citizen who is not liable to tax in any other country or territory shall be deemed to be resident in India. Such residents will have to pay tax on overseas income and disclose foreign assets.
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