Kerala Chief Minister Pinarayi Vijayan had written to Prime Minister Narendra Modi that the move will cause untold hardship to lakhs of Keralites working in various Gulf countries.

The proposed reduction of the period from 120 or more to 182 or more, the letter pointed out, is likely to adversely affect professionals leaving for employment in areas like oil rigs who will be in India off duty after a period of arduous work schedule.

In view of the fears voiced by the NRKs, the Chief Minister had demanded necessary changes in the Finance Bill 2020 to restore status quo.

It may be mentioned that the Finance Bill has proposed that an Indian citizen shall be deemed to be a resident in India, if he is not liable to be taxed in any other country or jurisdiction.

A subsequent clarification by the Finance Ministry that this was only an anti-abuse provision as it is noticed that some Indian citizens shift their stay in low or no tax jurisdiction to avoid payment of tax in India.

The clarification further said that in case of an Indian citizen who becomes deemed resident of India under the proposed provision , income earned outside India by him shall not be taxed in India unless it is derived from an Indian business or profession.

The clarification has not, however dispelled the fears of non-resident Keralites. Hence the Chief Minister’s letter to the Prime Minister.

The CM’s letter has said that Kerala’s economy, substantially supported by remittances comprising about 15 per cent of Kerala’s Gross Domestic Product , especially from those working in Gulf countries, will be adversely affected by this amendment.

The letter further requested the Centre not to go ahead with the amendment to Section 6 of the Income Tax Act 1961, proposing to reduce the stay period of 182 days or more for Indian citizens or persons of Indian origin to 120 days or more for being treated as Indian residents for tax purposes.

Kerala is looking forward to a positive response to the CM’s letter. So far, there has been no response from the Centre causing grave concern among lakhs of Indians working in Gulf countries, majority of whom are Keralites. (IPA Service)