Indians working abroad will not be in the tax network: CBDT
NEW DELHI: The government clarified on Sunday that the new provision on NRI was not intended to include Indian citizens who are workers in good faith in others in the tax network, establishing more than the new rule could subject They work in the Gulf under the tax scope.
The 2020 finance bill has proposed that an Indian citizen be considered a resident in India if he is not subject to taxation in any jurisdiction. The revenue department said it was a provision against abuse, as it was discovered that some Indian citizens changed their stay in low or non-tax jurisdictions to avoid paying taxes in India.
“In some sections of the media, the new provision is being interpreted to create an impression that Indians who are workers in good faith in other countries, even in Middle East , and those who are not obliged to pay taxes in these countries must pay taxes in India on the income they have earned there. This interpretation is not correct, the Direct Tax said in a statement.
To avoid any misinterpretation, it is clarified that in the case of an Indian citizen who is considered a resident of India under this proposed provision, the income earned by him outside India will not be taxed in India unless they are derived of an Indian business or profession. The necessary clarification, if required, will be incorporated into the relevant provision of the law, the statement added.