Top Indian entrepreneurs and business leaders in the UAE on Wednesday welcomed the Indian government's softening of the tax measures for NRIs and said two of their proposals were considered while making the amendments.
In a major relief measures for NRIs, Finance Minister Nirmala Sitharaman on Tuesday relaxed a budget proposal to tax them, putting in place a threshold of Rs 1.5 million for the levy of tax on incomes emanating from India, while leaving out global incomes from the tax ambit.
Business Leaders Forum (BLF), represented by top Indian entrepreneurs and business leaders in the UAE, in a press statement said the body's representation to the government on two counts was considered and taken into account while making the amendments.
"A representation sent to the government of India for reconsideration of the Proposed Amendments related to the Non-Resident Indians (NRIs) in the Finance Bill 2020 has been accepted," it said.
On February 4, the BLF passed a unanimous resolution to send a representation to Prime Minister Narendra Modi and the Finance Minister, requesting for amends to the proposal in the Finance Bill 2020 affecting NRIs.
The BLF representation stressed the government to consider doing away with Deemed Resident of India amendment and to consider maintaining 182-day stay in India to retain NRI Status.
The BLF said the representation on both counts was considered and accepted by the Indian government and the Bill has been passed in the Parliament.
"The Deemed Resident of India amendment has been withdrawn as it would have had multiple implications and the 182-day stay in India has been kept to retain the NRI status, except for some cases in which it is 120 days," it said.
"The Finance Bill, 2020 initially proposed to reduce such period of 182 days to 120 days for all. For those the period of stay in India has been reduced to 120 days whose income accrues or arises in India, or is deemed to accrue or arise in India or such income that accrues or arises outside India from a business controlled in or a profession set up in India exceeds Rs 15 lakhs," it said.
Further, section 6(6) has also been amended in a similar fashion to provide that in such cases where the person is considered to be resident in India on account of his stay in India exceeding 120 days under the proposed amendment, then in case the total period of stay does not exceed 182 days, such persons shall be considered to be "Not Ordinarily Resident".
Thus, in such cases as well, the global income will not be taxable but the income that accrues or arises in India, income that is received or deemed to be received in India or the income that accrues or arises outside India and is derived from business controlled in or profession set up in India shall only be taxable in India.
"This is wonderful news for the NRIs and more so for the Gulf businessmen and investors who currently have investments in India...We are very confident that this step will definitely boost the confidence of the NRIs and the business leaders who are looking ahead to invest and expand in India," BLF secretary general Sripriyaa Kumaria.
BLF has not only fostered the collective strength of the business leaders from UAE but also spearheaded the collective strengths of the business and professional councils and associations in UAE and GCC to resonate their opinions to the Government of India to consider this amendment, she said.
Vasu Shroff, recipient of Pravasi Bharatiya Samman Award and Chairman of Regal Traders, said the decision not only reinforces the importance and the contribution of the NRI's and the Indian business leaders in UAE and GCC countries but also reflects the policies of the Indian government favouring investments into India and encouraging the NRIs to invest in India.
Ram Buxani, Chairman of ITL Cosmos Group, said, "This is a very encouraging move. NRIs and business leaders in the UAE have always been supportive of the Prime Minister's robust initiatives and policies to promote trade and investment into India and shall continue to do so in the future."
Surender Singh Kandhari, recipient of Pravasi Bharatiya Samman Award and Chairman of Al Dobowi, said India is and will always be the first point of investment for not only NRIs but also for the global investors and this move will definitely be an additional incentive for NRIs to invest in India.
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