Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 2nd February, 2020


CBDT issues clarification on the new provision pertaining to residence in India

The Finance Bill, 2020 has proposed that an Indian citizen shall be deemed to be resident in India, if he is not liable to be taxed in any country or jurisdiction. This is an anti-abuse provision since it is noticed that some Indian citizens shift their stay in low or no tax jurisdiction to avoid payment of tax in India.

The new provision is not intended to include in tax net those Indian citizens who are bonafide workers in other countries. In some section of the media the new provision is being interpreted to create an impression that those Indians who are bonafide workers in other countries, including in Middle East, and who are not liable to tax in these countries will be taxed in India on the income that they have earned there. This interpretation is not correct.

In order to avoid any misinterpretation, it is clarified that in case of an Indian citizen who becomes deemed resident of India under this proposed provision, income earned outside India by him shall not be taxed in India unless it is derived from an Indian business or profession. Necessary clarification, if required, shall be incorporated in the relevant provision of the law.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.

More Under Income Tax


  1. Edwin Francis DSilva says:

    Dear sir/madam,
    With regard to the NRI criteria, what is the status of Indian seafarers? It is not realistic for most Indian Seafarers to meet the new days in India criteria.
    Please advise.
    Kind regards
    Edwin Francis D’Silva

  2. Edwin Francis DSilva says:

    Dear sir/madam,
    What will be the fate of Indian seafarers sailing on board foreign flag ships and whose earnings are remitted to their Indian NRE accounts by their overseas employee?
    Will seafarers still be granted tax relief by virtue of their unique place of work?
    If an Indian seafarer s employed onboard a Singapore flagged ship, he/she is infaft employed on Singaporean territory. Under Singapore tax laws, any seafarer employed onboard a Singapore flagged ship is not liable to tax.
    This is a matter of serious concern to 100000 or more Indian seafarers.
    Please advise.
    Kind regards
    Edwin Francis D’Silva

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