The Union Budget 2019 was announced by the Finance Minister, Nirmala Sitharaman on Friday 5th July. The budget introduced significant benefits as well as hike in prices in several sectors.
However, certain notable reforms have been introduced when it comes to NRIs, or Non-Resident Indians, which may lead to greater investments by them. Let us take a look at some of the changes introduced!
In the last few years, India has become a go-to destination for NRIs to invest in.
As a result, new terms have been introduced to make the process simpler. The simplifications introduced will hopefully improve the channels of investment and attract greater denominations in terms of NRI investments made, which will in turn improve the overall economic growth of the country.
One of the most important changes made by the Finance Minister, Nirmala Sitharaman is the merging of NRI portfolio investment scheme route with the Foreign Portfolio Investment (FPI) route.
A Foreign Portfolio Investment is a group of assets, such as equities, bonds and cash equivalents. These investments, or portfolio investments are either managed by professional financial advisors or directly by the investors themselves.
In addition to this, the process of issuing an Aadhaar card has also been further simplified.
Earlier, NRIs were required to wait for a mandatory period of 180 days, in order to be issued an Aadhaar card. However, the Union Budget 2019 changes that, as now Aadhaar cards will be issued to NRIs with an Indian passport upon arrival.
This move brings a great amount of relief to the NRIs as the Aadhaar card acts not only as a document for identification, but also as a proof of residence, containing both biometric and demographic data.
The third change brought about by the Finance Bill pertains to the Black Money Act. At present under the Black Money and Imposition of Tax Act 2015, only residents of India are liable to be probed by the tax department.
However, the Finance Minister has amended this to include Non-Resident Indians as well. So, what does this mean for NRIs? It will be increasingly difficult to bury undisclosed sources of income or assets (black money) from the tax department.
Law enforcement agencies can now freely pursue those incomes which are undisclosed foreign assets or even funds which have been parked abroad. This comes at the heels of global leaks like the Paradise and Panama Paper leaks. A tax official commented that these names which are willfully concealed in order to evade taxes imposed on the foreign accounts now come under the purview of law enforcement and can even be confiscated by authorities.
Stringent tax laws and greater incentives for investment, will ensure higher investment and overall growth of the economy, while at the same time reducing the number of tax evaders.
With these changes coming into effect on the 1st of September this year, we will hopefully see changes in the economic growth of the country and move a step closer to the vision of becoming a $5 trillion economy.
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