The Income Tax Bill 2025 endeavours to create a more transparent and efficient tax environment for NRIs, addressing long-standing challenges and promoting greater engagement with India’s economic growth, said tax experts.
This must be music to the ears of NRIs, many of whom were nervous and anxious when dealing with India as litigations were rising. The government’s attempt in the new Bill is to improve readability and provide confidence to them in dealing with India and its tax authorities.
The Bill aims to simplify the tax framework and address specific concerns of Non-Resident Indians (NRIs), they said.
This proposed law seeks to make tax compliance more straightforward and reduce ambiguities that previously affected NRIs.
The new Bill maintains the existing tax residency criteria for NRIs. Infact, it has introduced nuances for residency determination in complex cases (eg multiple citizenships). Additional guidance has been given for complex residential status cases.
Also, Individuals earning ₹15 lakh or more in India and not paying taxes elsewhere will continue to be classified as “Resident but Not Ordinarily Resident” (RNOR). This classification ensures that such individuals are liable to pay taxes only on their income earned in India, providing clarity and consistency in tax obligations.
Experts take
Akhilesh Ranjan, Advisor Price Waterhouse & Co LLP and former Member of CBDT, said there is no substantive change to NRI taxation. “There is no material difference. The provisions are stated in an easier language. It is now more clearer and less prone to litigation. Even on test of residency, there is no substantive change but language has changed”, Ranjan told BusinessLine here.
Commenting on NRI taxation in the new Bill, Akhil Chandna, Partner, Global People Solutions Leader, Grant Thornton Bharat, said the determination of an individual’s residential status is the first step in assessing their tax liability in India. Section 6 of both the existing Income-tax Act, 1961 and the proposed Income Tax Bill define residential status on the same principles; however, as in the case of the rest of the Income Tax Bill, the section has been refined.
“There will be no change in taxation landscape for NRIs pursuant to the new tax bill”, Chandna said.
Anil Talreja, Partner, Deloitte India, said the Income Tax Bill 2025 has attempted to simplify taxation for non-residents.
“A loud and clear message has been sent to the world that India is taking serious steps towards facilitating ease of doing business.
The Government has not essentially made any change in taxation of NRIs, but have only clarified to the extent they felt it was confusing”, Talreja said.
“The entire new Income Tax Bill stands on five principles as we see. Redundant provisions have been removed; they have simplified the law by removing cross referencing; brought in tables and formula to provide clarity; consolidated some provisions and removed sub-sections and clauses”.
Parizad Sirwalla- Partner, tax, KPMG in India “Even under – The Income Tax Bill, 2025 (new bill), the said category of taxpayers (who earn over ₹ 15 lakhs from India) will continue to be treated as RNOR and hence same tax treatment is also continued. No change”.