Budget 2025: The NRI’s wish list
Subscribe to enjoy similar stories. Non-resident Indians play a vital role in India’s economic and social progress, significantly contributing to the country’s growth through remittances, investments, entrepreneurship, and international trade. As the Union Budget for 2025-26 approaches, NRIs will be looking for clarity on certain rules as well as incentives and reforms that could strengthen their contribution to India’s economic landscape.
Under the Income-tax Act 1961, an Indian citizen visiting India can retain their non-resident status even if they stay longer than the threshold period of 60 days, provided the income threshold is also met. But the term ‘visit’ is not defined under the law, leading to ambiguity in cases where individuals make short trips to India and render services from the country. Clarity on what constitutes a ‘visit’ will help NRIs determine their residential status—which in turn has tax implications—and offer appropriate income to tax.
Also read | Tax breaks, reforms, and returns: Why NRIs are banking big on India NRIs often claim tax relief (tax credit/exemption) under applicable Double Taxation Avoidance Agreements or treaties in the tax return, leading to significant refunds. Clear guidelines/rules on claiming treaty relief at the tax withholding stage by employers will reduce the administrative burden and minimise refunds in the tax return. An amendment to Form 16 on claiming treaty reliefs will allow employers to account for that while deducting tax from salaries.
India’s tax laws allow employees of ‘eligible startups’, including NRIs, to defer paying taxes on employee stock options, or ESOPs. Employers can also defer withholding tax. This benefit should be extended to all employees,
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