Will India’s new tax ‘googly’ lead to Gulf expats rethinking investment plans?

Will India’s new tax ‘googly’ lead to Gulf expats rethinking investment plans?

India will stand to lose a large chunk of investments by some of its wealthy Gulf-based expats in the wake a government move to deny tax rebates on certain categories of income earned by non-resident Indians (NRIs) staying in countries which do not levy income tax on individuals, according to experts.

A new amendment in India's tax laws, approved by the country's parliament last week, made it mandatory for NRIs to pay taxes at applicable rates on their income earned in India beyond the stipulated threshold level if they do not pay income tax in the country they reside.

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The amendment on the definition of ‘liable to tax' in the tax law also made it incumbent on expat Indian businessmen residing in countries with no income tax to pay tax in India on their global income if their stay in India exceeds 120 days.

“This (amendment) will be a major blow to some of the Indian businessmen who have been staying in countries like the UAE for long, and were planning to invest a part of their wealth in India and were also planning