In just a few hours, India’s finance minister Nirmala Sitaraman will be unveiling the country’s annual budget. The document is as important for the non-resident Indians as it is for the resident Indians, for the incentives it offers for savings and investments and taxes it levies on the income generated in India.
Last year’s Union budget had revised norms on who qualifies as an NRI. Accordingly, visiting NRI’s whose total income in India is up to Rs 1.5 million during the financial year will continue to remain NRI’s if the stay does not exceed 181 days. However, in case the total income exceeds Rs 1.5 million, the stay in India cannot exceed 120 days.
Such limits on income discourages investments in real estate in India. With RERA [Real Estate Regulatory Authority in India] in place, it is good time for NRI’s to invest in gated communities. Linking residency status with rental income in the country discourages NRI’s to invest.
The Indian tax system has become robust in the last few years, however, there is still scope left to make it easier for the NRI’s to file their taxes. The government of India should make it easy for the NRI’s by bringing in indexation.
India’s growth is still on track, and so is the NRI interest in ploughing more investments back home. Even though the Covid -19 pandemic shook economies worldwide, India is expected to be back on the growth trajectory in a couple of years as per the economic survey.
India’s march towards a $5- trillion economy will benefit individuals, financial institutions and countries that partner with it. Last year, India managed to attract capital inflows from international financial institutions into India. They have bestowed their faith, trust, and confidence in the country.