CBDT issues clarification on the new provision pertaining to residence in India

Feb 05, 2020 | by Avantis RegTech Legal Research Team


The Central Board of Direct Taxes (CBDT) on February 02, 2020, issues 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 is not liable to be taxed in any country or jurisdiction. This is an anti-abuse provision since it is noticed that some Indian citizens shift their stay in low or no tax jurisdiction to avoid payment of tax in India. The new provision is not intended to include in tax net those Indian citizens who are bonafide workers in other countries.

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.


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