Bangalore: With the upcoming Union Budget on everyone’s mind, there is a lot of anticipation about the much debated topic of Direct Tax Code (DTC). Apart from making alterations in tax structures, DTC will also significantly affect NRIs. According to Economic Times, DTC has a seemingly detrimental effect on NRIs. ET has highlighted 3 points to clarify its notion –

1. Modification in Definition of NRI

According to the present definition, a person qualifies as a Resident Indian when (s) he fulfills either of the following criteria –

The person should have resided in India for a period of 182 days or above in the given year.

OR

The person should have resided in India for a total of 365 days or above within a span of 4 years preceding the given year and should also have resided for 60 days or above in the given year.

If any person fails to fulfill either of the above criteria but fulfills the following 2, then (s) he is automatically given the status of Not Ordinarily Resident.

The person has resided in India for a minimum of 2 out of 10 years proceeding the given financial year.

AND

The person has resided in India for 730 days or above in a period of 7 years preceding the given financial year.

If any person fails to fulfill all (4) of the above criteria, then (s) he is called a Non Resident Indian

According to DTC, any person will become the resident of India if (s)he has resided in India for 60 days or above during the given financial year and a total of 365 days during 4 years preceding the given financial year. Plus, NRIs will also be liable to give taxes on their global income.