India sets ₹1.5 mn income cap to tax NRIs |
Indian Finance Minister Nirmala Sitharaman in a softening move has put in place a threshold of 19668 dollars for the levy of tax on incomes emanating from India, while leaving out global incomes from the tax ambit. Through amendments to the finance bill, she provided a carve-out for REITs and InvITs in respect of changes in the taxation of dividends announced in the budget. Non-resident ecommerce firms will face a 2% equalisation levy or the so-called Google Tax. Sitharaman also raised special additional excise duty on petrol and diesel in the latest changes introduced as amendments to the Finance Bill, which was passed without any discussion amid vociferous demands from opposition for a fiscal stimulus to tackle the economic impact of Covid-19. The government had proposed to tax global income of NRIs who are not taxed in any jurisdiction, but later clarified that only incomes of NRIs derived from doing business in India or undertaking a profession in the country will be taxed. This was by way of an anti abuse provision against non-residents who don`t stay long enough in any tax jurisdiction to qualify as a resident and thus avoid being taxed.
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