The Indian government’s recently announced Budget 2024 brings significant changes for Non-Resident Indians (NRIs). This article summarizes the key points NRIs need to be aware of, including:

Tax Slab Rate Adjustments:

• The budget proposes adjustments to tax slabs, potentially impacting the tax liability of NRIs with Indian income. It’s crucial to understand the revised slabs to calculate your potential tax burden accurately.

New Standard Deductions:

• The introduction of new standard deductions might benefit NRIs. These deductions reduce your taxable income, potentially lowering your tax outgo. Carefully analyse the new deductions to see how they affect your tax situation.

Capital Gains Tax Revisions:

• The budget outlines revisions to capital gains tax, which could impact NRIs selling assets in India. Understanding the changes in capital gains tax treatment is crucial when planning property or investment sales.

FEMA Residency and TCS on Remittances:

• The budget clarifies how residency under the Foreign Exchange Management Act (FEMA) 1999 will be considered for determining the applicability of Tax Collected at Source (TCS) on foreign remittances. This information is vital to ensure you’re not subject to unnecessary TCS deductions when sending money back to India.

Removal of Indexation Benefit:

• The budget proposes removing the indexation benefit for capital gains calculations. Indexation adjusts for inflation, potentially reducing your tax liability. The removal of this benefit might increase your capital gains tax for certain assets.

Effective Date and Recommendations:

• All these changes are proposed to be effective from July 2024.

NRIs are advised to:

• Consult a tax professional to understand how these changes might impact their specific tax situation.

• Carefully review the budget documents and relevant notifications for detailed information.

• Stay updated on any further clarifications or amendments issued by the government.

While this article provides a general overview, seeking professional tax advice is essential for NRIs to navigate the changing tax landscape in India and optimize their tax liabilities.

Source: Budget 2024: Increased deductions, new tax regime tweaks and everything NRIs need to know — The Economic Times (indiatimes.com)