Expatriates can start their own company in India; no more taxes on foreign income; Minister of Finance gives hopes in Budget 2021

New Delhi: The budget proposal, which allows expatriates to start their own new ventures in India, will be a great opportunity for investors. At the same time, the benefit of taking away the double taxation of expatriates will not make a big move.

Currently, expatriate Indians need the participation of at least one native to start a venture in the country. But with the advent of the new budget, expatriates can now start their own business without any restrictions on investment or capital.

This will give a lot of confidence to the returnees and the expatriates now. Until now, the expatriate ventures have been under the LLP (Limited Liability Partnership) system. The condition was that two to as many people as possible would be able to participate. It is now being upgraded to OPC (One Person Company). The proposal is to provide more benefits for new ventures without any specific restrictions on capital and income.

The declaration of double taxation for expatriates does not apply to those in the Gulf countries. It benefits expatriates in areas including the US and Europe. The new budget proposal stipulates that income earned by retirement benefits of Indians abroad other than the Gulf will no longer be taxable in India. There is already a tax on salaries there. With this, the tax liability in India will be waived again.

Silence about NRI status

The silence of this budget on the suggestion in the last budget that NRI status will be lost if one stays in India for more than 120 consecutive days adds to the confusion of expatriates. This proposal was highly controversial in the last budget. With the introduction of the COVID restrictions following the announcement of the budget, thousands of people were forced to stay in India. Many who have lost their NRI status have been forced to pay taxes under Indian law.

Although the Central Board of Direct Taxes (CBDT) has announced some concessions in terms of duration for those who are unable to travel, the non-mention of it in the budget worries expats. They hoped to restore the 182-day rule that had existed earlier.

The reduction of customs duty on gold imported from abroad to seven and a half per cent is a great relief to the expatriates. Traders in the Gulf also hope that this will increase the supply of gold to the homeland. The reduction in tariffs on gold bars also makes the expatriate happy.