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How India Budget 2020 foxed a third of UAE residents

Vicky Kapur (From the Executive Editor's desk)
Filed on February 3, 2020 | Last updated on February 3, 2020 at 06.00 am
India's Finance Minister Nirmala Sitharaman holds budget papers.- Reuters

If NRIs earn their living and spend it in a foreign land, on what grounds will it be fair for them to pay taxes for services that they don't utilise?

Nirmala Sitharaman, India's first woman Finance Minister (full-time), broke two dubious records during her 2020 budget speech. First, at two hours and 41 minutes, this was the longest budget speech in Independent India (she actually broke her own record from last year). And second, she left the speech incomplete (she got unwell and stopped reading the marathon speech with two pages still to go). It caught the expats unaware when, somewhere between poems by Kashmiri poet Dinanath Kaul and sonnets by Tamil sage Thiruvalluvar, Sitharaman let it slip in that she was proposing a tweak in the rules of the game, resulting in some non-resident Indians (NRIs) becoming liable to income tax in India.

That clause was the cause of much confusion and disquiet for millions of NRIs across the world. NRIs remit a world-beating amount of money to India every year - an estimated $80 billion in 2019. Given the sizeable base of NRIs in the UAE (almost a third of the UAE's residents), Khaleej Times routinely publishes an NRI wish list before the annual budget exercise. And budget after Indian budget, the NRI wish list along with the hopes, aspirations, and requests of this non-vote-bank (unlike expats of several other countries, NRIs still cannot vote unless they travel to their home constituencies on election day) has been ignored, making us feel like non-required Indians.

So, as soon as there was confusion regarding NRIs being taxed on their income abroad, the WhatsApp groups lit up like a Christmas tree. Many a sarcastic comment and meme went around, but the underlying theme of the conversations was quite clear in its argument that if NRIs earn their living and spend it in a foreign land in a foreign currency, on what grounds will it be fair for them to pay taxes for services that they don't utilise. Anyway, the record-long budget speech obviously wasn't enough and the clause had to be clarified on Saturday by Ajay Bhushan Pandey, Revenue Secretary of India, and then through a press release by the government of India yesterday, assuaging taxation fears of bona fide NRIs. But in all this, Sitharaman may have had another record to her name - that of triggering the most panic-led conversations on WhatsApp groups among overseas Indians.


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