• Notification Date: 13-02-2025
• Notification No: N/A

New Tax Bill Aims at NRIs Earning More Than Rs. 15 Lakh: Redefining Residents for Rightful Taxation

The proposed Income Tax Bill has in store major changes for Non-Resident Indians (NRIs) who earn Rs. 15 lakh or more in India. The new scheme will consider such NRIs "residents" for tax purposes and tax their Indian earnings. The step aims to plug tax loopholes, curb tax evasion, and implement a more equitable tax regime.

The bill incorporates a modified rule of residence, according to which one shall be treated as resident if one stays for 182 days or more in India in a fiscal year or stays for 60 days in the same year and 365 days in the preceding four years. However, NRIs with an income of above Rs. 15 lakh shall have their test of 60 days extended to 120 days.

This reform aims to prevent misuse of NRI status so that those with high net worth cannot avoid tax by taking advantage of their exemption from worldwide income. It is also in line with global efforts to improve tax transparency and equity.

These changes will impact the taxation of several NRIs and upper-income taxpayers. They will have to reshuffle their fiscal plans to accommodate this new taxation practice since the administration is continuing with more enforcement and revenue.