The Indian Government is tightening its grip on NRI finances, targeting everything from foreign bank accounts to overseas businesses
The Indian government has introduced new tax regulations that affect Non-Resident Indians (NRIs) more than ever before. If you qualify as an RNOR (Resident but Not Ordinarily Resident), you could soon find your global passive income, foreign bank interest, stock dividends, and even capital gains taxable under Indian law. Failure to report foreign assets could result in a staggering 300% penalty, and jail time is also a possibility, reported m9.news.
Taxing foreign businesses, investments, and income sources is now mandatory for NRIs.
Running a foreign business and earning income from Indian clients is now taxable, even if the business does not have a physical office in India. The tax authorities are also demanding strict documentation for any tax relief claims, with penalties looming for any misstep. Investments in foreign assets, such as cryptocurrency, stocks, and even pension withdrawals, must now be reported for taxation purposes.
DTAA relief will be harder to claim, and using it as a loophole could lead to criminal charges.
NRIs hoping for relief under the Double Taxation Avoidance Agreement (DTAA) will find the process even more challenging due to stringent documentation requirements. Any attempt to exploit this as a loophole could lead to criminal charges. The only respite for NRIs comes when they return to India. For the first two years after returning, global income will not be taxed. However, beyond this period, all global income will be subject to Indian taxation.
With the government monitoring every transaction, asset, and foreign income, NRIs must tread carefully. Missing a detail could result in severe consequences like frozen accounts, heavy fines, or worse, criminal charges. Life for NRIs just got significantly more complicated with these new tax regulations.
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