10:52 GMT04 August 2020
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    New Delhi (Sputnik): India's cash-strapped federal government has tweaked income tax laws to bring any citizen, irrespective of their residence into the tax net, as was laid out in the budget proposals presented by Finance Minister Nirmala Sitharaman on Saturday.

    The Narendra Modi government's proposal to tax non-resident Indians (NRIs) if they are not paying duties in their country of residence, has sent shockwaves among the largest diaspora in the world, which is estimated to be 17.5 million, according to a UN report.

    The government’s contention was that many NRIs use the tag to take advantage of loopholes in the existing taxation system.

    "We have made changes to the income tax (system). Earlier, an Indian citizen would become an NRI if he stayed out of the country for over 182 days. Now he has to stay for 241 days. In many cases, we found that some people were residents of no country... we've said that if any Indian citizen, if he is not a citizen of India, is deemed to be a citizen of India and his worldwide income will be taxed", news agency PTI quoted Revenue Secretary Ajay Bhushan Pandey as saying.

    The majority of the Indian diaspora lives in the Gulf region, where many countries, including the United Arab Emirates and Saudi Arabia, are tax-free.

    Former UN diplomat and parliamentarian from the opposition Indian National Congress Shashi Tharoor has alleged that the proposal would badly affect Indian workers in Gulf states, the bulk of them from his home state of Kerala.

    There were an estimated four million Keralites in the Gulf region, according to a study by the provincial government-funded organisation NORKA Roots.

    ​The new tax proposal has resonated across the internet, too:

    The new taxation provision for Indians abroad would come into effect starting the next fiscal year, 2021-2022.

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    income tax, Nirmala Sitharaman, Budget, New Delhi, India
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