Now Reading: Budget 120-day rule won’t hit salaried NRIs: tax expert
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Budget 120-day rule won’t hit salaried NRIs: tax expert
Salaried non-resident Indians working in countries like the UAE will not be affected by the budget proposal to treat those staying in India for over 120 days as residents, a tax expert…
Salaried non-resident Indians working in countries like the UAE will not be affected by the budget proposal to treat those staying in India for over 120 days as residents, a tax expert has said. The relief stems from the individual's residency status in the host country and the double taxation avoidance agreement (DTAA) India has with most such nations.
"If an individual lives in the UAE for more than 180 days, he is automatically a resident of UAE," said Dixit Jain, Director of The Tax Experts DMCC. This means such NRIs remain non-resident for Indian tax purposes, and the 120-day threshold in the Finance Bill does not apply to them.
Indian Opinion Analysis
The 120-day rule proposed in the Finance Bill 2025 was intended to widen the tax net for those who spend significant time in India while claiming non-resident status. However, salaried NRIs in countries with which India has a DTAA are protected because tax residency is determined primarily by the treaty's tie-breaker rule, not by the domestic threshold. The key test remains physical presence in the host country: staying over 183 days there typically cements residency. For NRIs in the UAE, the absence of personal income tax means no double-taxation conflict arises, but the treaty still overrides domestic law. The actual impact will be clearer after the final Budget is passed.
Source: gulfnews.com
This story was synthesised by AI from the source linked above.
