The “demeed residency” clause remains unchanged from the current law in the Income Bill 2025, and the non-resident Indians (NRIs) will continue to be taxed on the income they earn in India, tax experts said.
There is no change as such in the meaning of resident or non-resident as per Section 6 of the new Bill, they noted.
Tthe I-T Act, 1961 stipulates that for a taxpayer to be considered a “resident,” the condition of stay in India is 60 days or more in “current year.” This, however, does not apply to a citizen who leaves the country “for the purpose of employment outside India.” The new Bill replaces this expression with “for employment outside India,” to simplify the language.
The concept of deemed resident was introduced by Finance Act 2020 to cover Indian citizens with income above Rs 15 lakh from Indian sources and who were not liable to tax in any other country. The new Bill retains this provision with minor refinements but clarifies that this does not apply to individuals who already qualify as resident under other provisions in the new section, explained Akhil Chandna,partner, Grant Thornton Bharat.
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Amit Maheshwari, tax partner, AKM Global said that non residents while selling their property in India face a higher tax withholding of more than 20% on gross sale price of the property, which leads to unnecessary blockage of funds in India and it adds to their hardship somewhere since tax refunds do get delayed or stuck. “This should have been addressed in the new Bill but the provision remains as it is,” he added.
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