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Foreign Investors Forum seeks rationalisation of tax norms for foreign nationals living in India


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The Foreign Investors India Forum has urged the government to relax tax provisions for foreign nationals working in India and align them with similar provisions in countries like Singapore and China, in a bid to attract investment and encourage high-flying corp
orate executives and fund managers having overseas incomes to stay in the country.


Under the current income tax (I-T) provisions, the global income of foreigners is taxed if they stay in India for more than 182 days in a year , thus increasing their personal tax liability in the country. This provision acts as disincentive for foreign nationals, having global income, to stay in India for longer periods.

A letter in this regard was written by Foreign Investors India Forum's global chairman BK Modi to Prime Minister Narendra Modi who referred the matter to the Commerce Ministry for further consideration. The Ministry is reported to have taken up the issue with the Finance Ministry.

India, according to the Forum, needs global partnerships and new investments which would happen if the government creates a more enabling tax regime and a "progressive personal taxation" structure.

Although foreign domiciled individuals residing in India can avail treaty relief in double taxation on non-Indian incomes, challenges like paying higher taxes, availing tax credit benefits, subjectivity in tax assessments and risk arising due to reporting requirements may arise.

The pace of economic growth can be accelerated by increasing the rate of FDI in India and for this, foreigners need to be incentivised to live and invest in India, it said.

Foreign citizens must be allowed to tend to their investments and stay in India for long periods. It is recommended that the personal taxation policy for such It is recommended that the personal taxation policy for such people must be reviewed and they should be taxed only on any income that is generated domestically in India, the Forum said.

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Regards 
Aseem Aggarwal
CA, CPA, CS, B.Com(H)
+91 7508000350
aseem@ksafirm.com

Source: https://timesofindia.indiatimes.com/business/india-business/foreign-investors-forum-seeks-rationalisation-of-tax-norms-for-foreign-nationals-living-in-india/articleshow/81350103.cms

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