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Budget 2022 Expectations: Here's What NRIs Expect From The Budget 2022
Budget 2022 is just around the corner and like every other category NRI population has some of its own set of expectations from the annual budgetary event. The NRI population is said to contribute a good 35-40% of direct tax revenue so here is a look at some of the provisions in the IT Act that can be revisited for advantage to the taxpayer category:
1. Taxation of foreign salary when employed abroad:
This corona outbreak has brought many back home both from India and outside India and those employed abroad and still rendering their employment services from within India i.e. the NRI population becomes taxable in the country or may face significant increase in tax implications in India because of higher rates in India as their foreign income also attracts tax withholding by employers.
So, as the foreign tax credit can be claimed for only after end of the fiscal year when the return is being filed, it is desired that the centre offers a relief in taxation of foreign employment income atleast in such uncertain times when because of Covid the NRI population has been stuck here.
2. Relief in tax withholding rates:
Some income receipts of Nri attract tax withholding at applicable rates as a result of which tax is being withheld at 30% tax plus surcharge and cess. Say for instance, the rate for tax deduction at source (TDS) on rental income is specified at 5 per cent or 10 per cent for resident taxpayers based on the category of payment. However, such rental payments are often taxed at 30 per cent (plus surcharge and cess) in case payment to non-resident property owners.
So, it is expected that there shall be considered rationalisation of TDS for NRIs that shall indeed not impact much the government's revenue stream.
3. Easy compliance norms with simple ITR forms for NRIs
The government in a bid to ease the compliance burden of NRIs may consider introducing simple tax forms for those who have no capital gains or income in India or have some specified income. Currently the simple forms ITR 1 and ITR 4 is for resident Indians only.
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