India’s Direct Tax Code provisions to bring sweeping changes for persons of Indian origin

After introducing the Rupee symbol for the first time, government of India is seeking to overhaul tax code which will replace the Income tax Act enacted in 1961. This was felt necessary to reflect economic and political changes in recent times. Economy is growing at faster rate than ever and new vistas are opening up in globalization. Along with many other changes and codification of certain Supreme Court decisions, the Direct Tax Code brings in few changes that can affect certain sections of persons of Indian origins – better known as NRI or Non Resident Indians. Traditionally India has given many investment incentives in terms preferential tax treatments to NRIs who have settled overseas and acquired permanent residence or citizenships of other countries. Prior to the proposals, NRIs visiting India were not taxed on their overseas income if their combined stay during the year did not exceed 182 days. The new proposals intend to shorten this period to 59 days. Consequently, if any NRI meeting certain other conditions, stays in India for more than 59 days, his or her overseas income can also be subject to tax in India. Various interested groups have raised concerns to these changes and it will be interesting to see what the final outcome would be.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s