As Union Budget 2025 approaches, NRIs anticipate reforms that simplify compliance and enhance financial flexibility
Non-Resident Indians (NRIs) play a vital role in India’s economic landscape through remittances, investments, and entrepreneurship. With the Union Budget for 2025-26 set to be announced, NRIs are looking for measures that streamline tax processes and address long-standing challenges, reported indiatoday.in.
Treaty Relief at Source
NRIs face cumbersome processes to claim tax relief under Double Taxation Avoidance Agreements (DTAA). Introducing treaty relief at the tax withholding stage, with necessary amendments to Form 16, could reduce administrative hurdles and ensure timely compliance.
Expanding ESOP Tax Benefits
Currently, ESOP tax deferrals are limited to employees of eligible startups. Extending these benefits to all employees, including NRIs, could improve compensation structures and cash flow management.
Simplifying TDS for Property and Rent
The Tax Deducted at Source (TDS) process for property sales and rental income is often complex for NRIs. Simplified procedures and enhanced digital tools would make compliance more efficient.
Overcoming E-Verification Challenges
Many NRIs encounter difficulties e-verifying tax returns due to the lack of Aadhaar or Indian bank accounts. Streamlined verification methods and access to tax forms from overseas IP addresses could ease this process.
Proposed tax reforms could simplify compliance and foster deeper engagement with India’s economy.
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The proposed reforms aim to simplify tax compliance, enhance financial flexibility, and strengthen NRI engagement with India’s economy
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By addressing these concerns, the government can reinforce India’s position as a global economic powerhouse while creating an inclusive and seamless tax ecosystem.
Extending Simplified ITR-1 Form to NRIs
Since many NRIs have limited income sources, expanding eligibility for the simplified ITR-1 form would significantly reduce the compliance burden.
Tax Refunds and Payments via Overseas Accounts
Delays in refund credits and restrictions on payments via Indian accounts create financial hurdles for NRIs. Enabling transactions through overseas accounts would resolve cash flow challenges.
Revising Deadlines for Belated Returns
Allowing NRIs to file belated or revised returns until March 31 of the assessment year would provide adequate time to claim foreign tax credits and ensure accurate compliance.
These proposed reforms aim to simplify tax compliance, enhance financial flexibility, and strengthen NRI engagement with India’s economy. By addressing these concerns, the government can reinforce India’s position as a global economic powerhouse while creating an inclusive and seamless tax ecosystem.
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