Budget 2025 expected to introduce measures to ease tax compliance for NRIs and individuals
As Budget 2025 approaches, expectations are high for reforms that will simplify tax filing procedures for individuals and businesses. Over recent years, the government has taken significant steps to streamline tax compliance, and further changes are anticipated to ease the process , reported businesstoday.in.
Proposed tax reforms to reduce compliance burden for NRIs and individuals
- Simplifying TDS for Home Buyers
Currently, home buyers purchasing property from an NRI seller must deduct tax at a higher rate, obtain a Tax Deduction Account Number (TAN), and file e-TDS returns. To simplify this, the government could introduce a challan-cum-statement Form similar to the process for resident sellers.
- Simplified Tax Return Form for Non-Residents
Residents earning income from salary, one house property, and other sources can file ITR-1 if their total income is up to INR 50 lakhs. Extending this simplified return to NRIs with investment income in India would ease their compliance burden.
- Enabling Refunds to Overseas Bank Accounts
Currently, income tax refunds can only be credited to pre-validated Indian bank accounts. Budget 2025 may introduce provisions to allow refunds directly to overseas accounts, making the process smoother for NRIs.
- Extending Time Limit for E-Verification
Taxpayers must e-verify returns online or submit a signed physical copy within 30 days. This is challenging for NRIs who may not be in India. Extending the time limit for physical verification to 90 days would provide relief.
- Ease in Compliance with Form 10F
NRIs claiming treaty benefits under DTAA must submit a Tax Residency Certificate (TRC) along with Form 10F. As obtaining a TRC is often delayed in foreign jurisdictions, allowing submission at a later stage would help taxpayers.
- E-Verification through Email OTPs or Foreign Mobile Numbers
Currently, e-verification requires an OTP sent to an Indian mobile number. Many NRIs face issues receiving OTPs due to inactive numbers. Allowing OTPs via email or foreign mobile numbers could resolve this problem.
- Setting a Timeline for Disposal of Appeals
There is no fixed timeline for appeals before the Commissioner of Income Tax (Appeals), leading to delays in tax dispute resolutions. The government may introduce a structured timeframe to expedite tax litigation.
- Increasing Time Limit for Filing Revised Returns
Currently, the deadline for revised returns is December 31 of the following financial year. For NRIs claiming Foreign Tax Credit (FTC), this creates difficulties as overseas tax filings (e.g., US filings) occur later. Extending the deadline to March 31 would allow taxpayers to claim FTC accurately.
These measures, if implemented, will significantly simplify tax compliance, making processes more efficient and taxpayer-friendly.
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