THIRUVANANTHAPURAM : The proposed tax on NRIs is an out-of-the-blue blow to Indians working abroad, said Chief Minister Pinarayi Vijayan. Sec 6 of Income Tax Act specifies parameters that residential status of an individual. The Finance Bill presented along with the Budget seeks to amend these parameters, which would in turn have a huge adverse impact on the NRIs, CM said.
Presently citizens or people of Indian origin, who reside in the country for 182 or more days, are considered as residents of India. The proposed Amendment seeks to shrink that period to 120 days. In the ordinary course, every Indian resident is required to pay taxes though he may be employed abroad. However, a non-resident Indian is exempted from such taxation. Amd the new amendment would put an end to that exemption.
Though the explanatory note on the Finance Bill dubs the amendment as measure to check tax evasion, the change is bound to adversely affect those who abide by tax laws. Those engaged in work or business abroad have ties and familial responsibilities back home. Cutting down number of resident days to 120 from 182 for tax purposes, is like a stab on their relationship and responsibility with homeland.
The situation is worrisome given that, Indians working in oil companies, merchant ships and oil rigs are allowed more than 120-vacation in a year owing to the rigors of their job. The same goes for those who are compelled to stay back from unavoidable circumstances at home. Slashing relaxations allowed to NRIs would be simply catastrophic.
Another proposed amendment requires all Indian citizens who are not liable to pay tax in the country or territory elsewhere, owing to their residence/domicile etc would be eligible to pay taxes here. Undeniably, checking tax evasion and utilising funds thereof for social welfare is a welcome measure. However the present proposal would prove devastating to middle-east employees belonging to low income bracket.
The govt should not seek to distress people who send home money from their extreme hard work abroad. In Kerala, money remitted by non-resident Malayalis plays a crucial in the economy. The amendment therefore, without doubt, would shatter the State’s economy.
The proposed amendment, proclaimed as measure to monitor tax evasion, would actually end up crushing ordinary people who labour hard in other countries to send foreign currency home. The Centre should therefore refrain from making the proposed move, said Chief Minister concluding his address in the capital.
