Union Budget: Benefits For NRIs

Finance Minister Nirmala Sitharaman has proposed scrapping the double taxation imposing on NRIs on income accrued through foreign retirement benefits accounts and for claiming relief on tax deducted in India.

The announcement was made during the Union Budget session on Monday.
“When Non-Resident Indians return to India, they have issues with respect to their accrued incomes in their foreign retirement accounts. This is usually due to a mismatch in taxation periods.

They also face difficulties in getting credit for Indian taxes in foreign jurisdictions. I propose to notify rules for removing their hardship of double taxation,” she said.

According to the Live Mint, the Budget said the government will soon notify rules regarding the taxability in the hands of such NRIs relating to their withdrawal/redemption proceeds from their foreign retirement accounts which were opened whilst being non-resident in India.

Currently, there is a mismatch in the year of taxability of withdrawal from retirement funds by residents who had opened such fund when they were non-resident in India and resident in foreign countries.

Reducing the residency list for NRI’s from the present 182 days to 120 days, Budget eased norms for NRI’s to set up of One Person Company (OPC) .

Previously, only the resident Indian citizens were allowed to set up one-person companies in the country.

“I propose to incentivise the incorporation of OPC by allowing OPCs to grow without any restrictions on paid-up capital and turnover. Allowing their conversion into any type of company any time. Reducing the residency limit for Indian citizens to 120 days from 180 days. This will be a big boost to startups,” she said.