Drop amendment in IT Act, Centre told

Assembly unanimously passes resolution against the proposal

The Assembly on Thursday unanimously passed a resolution urging the Centre to drop the proposal in the Finance Bill 2020-2021 to amend Section 6 of the Income Tax Act of 1961 as it will badly affect the Non-Resident Keralites (NoRKs) and the State’s economy.

The proposed amendment in the name of checking tax evasion will prevent hundreds of NoRKs, especially those working in Middle East countries, from coming down to stay with their families, the resolution moved by Chief Minister Pinarayi Vijayan noted.

Tightening the residency provisions, the Finance Bill had proposed to reduce the period of stay in India to 120 days from 182 days earlier for persons of Indian origin (PIOs) to be categorised as Non-Resident Indians (NRIs) with effect from April 1, 2020.

The amendment will lead to reduction in the income of those engaged in small business and they will be able to retain the non-resident status only if they stay abroad for 240 days. At present, only 182-day is enough. Those working in the oil rigs and coming home for one month off duty will also be affected.

The NoRKs have a significant contribution in the economy of the State and their contribution accounts for 15% of the Gross State Domestic Product. The economy of the State that has been affected by the slowdown will be badly affected if the Centre went ahead with the proposed amendment.

The resolution also pointed out the proposal to amend the IT Act of 1961 to tax Non-Resident Indians not paying taxes in any foreign country. Now, if an Indian or a person of Indian origin managed his stay in India such that he remained a non-resident in perpetuity, he was not liable to pay tax on his global income here.

The State government, immediately after the presentation of the Union Budget on February 1, had opposed the proposal. The Centre, officially clarified, that the amendment was not aimed at taxing Indian citizens working abroad. The situation would be different if the proposals in the Finance Bill 2020 were included in the IT rules, the resolution said.

Source: Read Full Article