In a move designed to rope in tax avoiders, Indian Finance Minister Nirmala Sitharaman has targeted Non-Resident Indians (NRIs) in this year’s Union Budget.
Presenting this year’s Union Budget in Parliament on Saturday, the finance minister Ms. Sitharaman targeted those NRIs, mainly mega film stars and other high-net-worth individuals who have made tax havens such as Dubai their retreat, to avoid various taxes in India.
Starting with the new budget, to qualify as an NRI, a person will have to spend a total of 240 days out of the country, against the 182 days previously. Also, if they are not taxed in the foreign country, they will become taxable in India on their worldwide income.
Meanwhile, for Indian income tax payers, the finance minister has provided major income tax cuts across most tax slabs. The income tax rate has been revised to 5 percent tax for income between Rs2.5-5 lakh; 10 percent tax for income between Rs5-7.5 lakh as against 20 percent; 15 percent tax for income between Rs7.5-10 lakh as against 20 percent; 20 percent tax for income between Rs10-12.5 lakh as against 30 percent; 25 percent tax for income between Rs12.5-15 lakh as against 30 percent; and 30 percent tax for income above Rs15 lakh.
The budget also offers taxpayers the option to avail of the reduced tax rates and forego all tax exemptions, or to remain with the previous tax rate and continue to claim various tax exemptions.
