KOCHI: The Finance Ministry’s clarification that Non-Resident Indians (NRIs) will be taxed only for their India earnings and they will enjoy NRI benefits only if they stay overseas for 240-plus days have not soothed the nerves of Gulf-based Indian businessmen as they travel to their home country for business and vacations very often.
Billionaires like Yusuffali M A of Lulu Group, Azad Moopen of Aster DM Healthcare, Shamsheer Vayalil of VPS Health Care and others are not taxed for their global income as they enjoy NRI status. This is against 30 per cent income tax for resident Indians.
“Though I am an NRI, we (Lulu Gourp) have been paying taxes for our Indian businesses from the beginning and there is no change in our tax status,” said Yussufali through a spokesperson. “However, we are awaiting some clarification from the ministry regarding the requirement of minimum stay of 240 days abroad. We will respond once we receive it,” he said.
Azad Moopen of Aster DM Healthcare said: “We have hospitals in GCC as well as in India. We are required to travel quite frequently. There will be a little bit of impact, but I don’t think it’s a major issue for us to conduct business.”
He said with a closer watch, the 120 days restriction to stay in India can be managed. “Self-monitoring is sufficient. I have had experiences, at least in some years, of staying more time in India during holidays and spending the summer here in the Gulf,” Moopen told TNIE over phone. “I don’t think it’s shop-stopper or something which will prevent anybody from doing business in India,” he added. Moopen pointed out that Aster DM Healthcare, a BSE-listed company, is an India-registered company. The company pays tax on the revenues generated in India.
According to Moopen, there’s still a confusion whether the NRI income will be taxed in India. “Luckily, that issue got resolved after the finance ministry quickly came out with a clarification,” he said.Some analysts pointed out that the union budget may be trying to plug a loophole where people stay for 180 days (as stipulated now) just to enjoy the benefits of NRI status.
Hitesh D Gajaria, partner and head, tax, KPMG in India, said there was no reliable data on how many of these people are there doing such a practice and if so, how much Indian tax they evade.Nissy Solomon, senior research associate, CPPR, a think tank, said the amendment aims at those who move to countries of low or no-tax for tax avoidance.“However, there are many ambiguities in the new provisions which need more clarification to arrive at its actual intent,” said Solomon.
State will continue efforts to help NRKs: CM
T’Puram: The state government will continue its intervention to dissuade the Centre from reducing the period of stay of expatriates in India to retain their NRI status, said Chief Minister Pinarayi Vijayan. The Centre has proposed to reduce the period of stay in India to 120 days from 182 days for persons of Indian origin (PIOs) to be categorised as non-resident Indians (NRIs). The state has sent letters to Prime Minister Narendra Modi and parliamentarians raising this demand. “We have intervened in the issue and will continue efforts to help the non-resident Keralites (NRKs),” he said in the Assembly on Monday. The chief minister said several NRKs would find it difficult to adhere to the new norm. “People who work in oil rigs and some other fields are eligible for long leaves and spend considerable time in India. Also, those who are joint partners in overseas ventures take long leave in turns. The move will affect them all,” said the Chief Minister.