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The new Income Tax Bill, 2025, brings significant changes for Non-Resident Indians (NRIs). One of the key changes is the stricter tax recovery measures. The tax authorities now have enhanced powers to access electronic records, which will help in better tax compliance and prevent tax evasion.
The Bill also redefines tax residency for those earning Rs 15 lakh or more annually in India. Now, NRIs will be taxed only on income sourced from India. This includes dividend income from Indian companies, which will attract a 20% tax. However, dividends from units in an International Financial Services Centre (IFSC) will be taxed at a lower rate of 10%.
Additionally, interest income from Indian government or companies will be taxed at 20%, except for infrastructure debt fund investments, which will be taxed at a concessional rate of 5%. The Bill also offers some relief for NRIs reinvesting long-term capital gains from foreign exchange assets into specified assets within six months. They may qualify for an exemption from capital gains tax if they meet this condition.
Overall, the Bill aims to improve tax compliance and leverage digital footprints to prevent tax evasion. The changes are expected to have a considerable impact on the financial planning of NRIs.
