As the Indian government led by Prime Minister Narendra Modi unveiled the budget for the financial year 2020-21 on Saturday, the proposed changes in taxation have left expatriates in Saudi Arabia and other Gulf countries in shock and confusion.
“In the Income Tax Act earlier an Indian citizen stayed out of the country for more than 182 days, he would become a non-resident. Now we’ve made some changes, according to which to become a non-resident one has to stay out of the country for 240 days,” said Revenue Secretary Ajay Bhushan Pandey.
Pandey further said that an Indian citizen, staying abroad for a certain period without paying tax, will be considered a resident of India, and his worldwide income will be taxed in India.
This has caused a great deal of concern among Indians living in the Kingdom.
Modi’s right-wing government has been trying desperately to revive the economy, which has flagged for several quarters, with per capita consumption falling for the first time in four decades.
Indian taxpayers are allowed to claim exemptions for a range of expenses, from medical insurance to vacation spending, under a labyrinthine tax regime that the minister has vowed to simplify during her tenure.