Quick Summary
As Finance Minister Nirmala Sitharaman gears up to present the Union Budget 2025, the global Indian diaspora of 35.42 million is hopeful for much-needed tax reforms. Non-Resident Indians (NRIs) are particularly looking for changes in residency rules, simplified property transaction tax processes, and relief in trading income taxation to navigate Indias tax system more efficiently. Residency Rule Update: Simplifying Compliance The 2020 Finance Act introduced stricter tax residency norms, cate
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FAQ :
NRIs are hoping for reforms in tax residency rules, simplified property transaction tax processes, and relief in trading income taxation to make navigating India's tax system more efficient.
The 2020 Finance Act introduced stricter norms. NRIs staying 120-182 days with Indian income above Rs 15 lakhs are classified as 'not ordinarily resident', making their India-sourced income taxable at resident rates. NRIs want the 182-day limit reinstated to reduce ambiguity.
When selling property, NRIs face a complex TDS process under Section 194-IA, requiring a TAN, submission of e-TDS returns, and dealing with higher tax rates, which they wish to see simplified.
NRIs find the taxes on trading income to be high and are calling for reductions to encourage their participation in India's financial markets and attract long-term investments.
Challenges include Aadhaar linkage requirements and the inability to e-verify tax returns due to a lack of Indian bank accounts or access issues from foreign IP addresses.
Experts suggest allowing Tax Residency Certificates (TRCs) from past years with an option to submit the current year's TRC during tax filing, as foreign authorities often cannot certify residency for future periods.
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