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The Budget 2020 has given a red-eyed attention towards the NRIs, where NRIs have been badly affected due to huge changes in both terms Residential Status as well as their Tax Liability on Global Income. This budget has brought all the “Residents” and “Deemed to be Residents” under one tax regime.

Change in Residential Status

The Budget has enhanced the time period to complete Non-Residential status from 184 days to 246 days outside India.

The Budget has also changed the number of years required for being resident by an individual to qualify as “Ordinarily Resident” from at least three years currently to at least Five years out of the previous 10 years. This would make the “Not Ordinarily” resident an “Ordinarily Resident” if he/she was resident individual in Five years out of the 10 previous years.

Tax on Global Income

The Budget has introduced very important terms “Deemed to be Resident” and “Tax Liability” where any Individual who are Citizen of India not liable to taxed or pay tax any country or territory by reason of his domicile or residence or any other criteria of similar nature shall be Deemed to be Resident in India and their Global income will be taxed as per new tax regime.

Paper Publication
The Telegraph, Dated: Febraury 04, 2020

“Terming the Budget 2020 proposal to tax NRIs in India as ”draconian”, maritime unions on Monday said they will call on Nirmala Sitharaman to express their concerns. Countries like Philippines and Ukraine compete with India for a global share of seafarers, but they do not levy high income taxes, they said.”

PTI, Dated: Febraury 02, 2020

“Revenue Secretary Ajay Bhushan Pandey said Indians working in the Middle East, as well as those in Merchant Navy, will not be taxed using the new provision.”

“Somebody who is a citizen of India and sitting in a tax haven and not paying taxes then he has to pay tax," he said. "By issuing clarification, we have kept them (workers in the Middle East) out. Same for merchant navy because their income is also not arising out of India.”

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