The government on Sunday has clarified that the Non- resident Indians (NRIs) who are working in the income tax- free jurisdictions such as the United Arabs Emirates would have to pay tax only on their income that is generated in India but no on their earnings that are made outside the country.
The Finance Minister of India Nirmala Sitharaman has said that the statute will be comprised of the clarification in order to clear any confusion that would arise among the tax officials.
The Finance Bill of 2020 has said that a citizen of India shall be deemed as a resident of India if he or she is not liable in any other country or territory. This has led to the concern that the NRIs who are working in other countries who do not get their personal income taxed would be asked to get taxed in India on their global earnings just like the manner in which the residents are asked to pay the tax on their global income. The Non- resident Indians would be left with less money if their income would be charged with 30% tax plus cess and surcharge.
The ministry of Finance has also clarified that income that has been earned outside India by the citizen of India who have become a deemed resident of India under the provision which has been included in the Finance Bill, shall not be asked to pay the tax in India unless and until it has been derived from an Indian profession or an Indian business.
Nirmala Sitharaman has added saying that the earnings of the NRIs in India such as rental income from the property in India shall be taxed by way of the new provision in the Finance Bill 2020 as the NRIs who live in other country and are not taxed there and who also have the properties which belong to them in India but neither do they pay the tax here as they do not live here nor do they pay the tax in the country they are living in.
It has been said by the Central Board of Direct Taxes (CBDT) that the new provision does not intend the inclusion of those citizens of India in the taxation net, who are the bonafide workers in other countries, as said in a statement.
It has stated that it shall be incorrect if the Indians who are bonafide workers in other countries which also includes the Middle East, and who are not liable to pay the taxes in those countries to be get taxed in India on the income that they earn in the countries that they are residing in.
A provision that has been introduced by the Union Budget says that every Indian who is not liable to tax in any other country by virtue of his residence would be deemed as the resident of India and the global income of that person would be taxable in India.
 who are working in the income tax- free jurisdictions such as the United Arabs Emirates would have to pay tax only on their income that is generated in India but no on their earnings that are made outside the country.){kind=link}