NRIs confused over Indian budget proposals

India’s union budget presented on Saturday has left expats in the Kingdom confused with the finance ministry making amendments on the definition of Non Resident Indians (NRIs) and proposing changes in taxation. The amendments stipulate 240 days, instead of 182 days, of overseas stay to be considered as an NRI and any Indian staying in India for 120 days or more will be considered as a resident and taxed.

Another proposal is to impose taxation on worldwide income if “an NRI is living in different countries,” according to India’s Revenue Secretary Ajay Bhushan Pandey. This particular provision would impact those Indian citizens living in taxfree countries like the UAE, Saudi Arabia, and many other Middle-East countries. This is a big jolt for many Indian citizens living on these jurisdictions. India and Bahrain are yet to sign a Double Taxation Avoidance Agreement Treaty.