The Central Board of Direct Taxes through its press release dated 2nd February, 2020 has issued clarification on the new provision pertaining to residence in India.
The Finance Bill, 2020 has proposed that an Indian citizen shall be deemed to be resident in India if he or she is not liable to be taxed in any country or jurisdiction. It said that the new provision in Finance Bill, 2020 is not intended to include in tax net those Indian citizens who are bonafide workers in other countries. It is only intended to prevent abuse of double taxation avoidance laws and to check tax avoidance.
In order to avoid any misinterpretation, it is clarified that in case of an Indian citizen who becomes deemed resident of India under this proposed provision, income earned outside India by him shall not be taxed in India unless it is derived from an Indian business or profession. Necessary clarification, if required, shall be incorporated in the relevant provision of the law.
Click here to read the Notification.
