Year 2019, being an election year was supposed to be smooth, without much changes in Taxation regime. Yet to everyone’s surprise government came up with many Tax goodies for middle class tax payers. However rich and the super rich still burdened with Surcharge, which hasn’t done away with. Having said that, we all know this saying “There is NO FREE DINNER”.
Government with the intent to curb evasion and widening tax net, has taken numerous steps. CDBT notified Income tax returns last week and it has made clear that Government wants Tax payers to come clean, including the NRI’s . Following are the changes which will bring in more Transparency and curb evasion:-
1. NRI’s would now have to disclose details of residency in foreign country.
2. Tax Identification numbers allotted to them. With this, through exchange of information Government would keep a track on Evasion.
3. Additional disclosure on assets held abroad. This isnt a welcome move since NRI’s would be reluctant to share the same with GOI.
4. Basis of determination of of residential status in India. Government here is serious of not passing any tax goodies. Residential status do, tax benefit lo.
5. Tax residency certificates number to be quoted in returns:- With this, Government can catch hold of Tax payers taking benefit under DTAA and not paying Taxes in either of the contracting states.
If this seems to be too much, we are yet to see the worse. Next stage implementation of Base Erosion and Profit Sharing (BEPS) and General Anti Avoidance Agreement Rule (GAAR) would definitely be a final Nail in the coffin.However steps taken seems to be in line with this. May in some years, Professional would advise clients coming up for structuring as ‘PAY KARO TAX, KARO RELAX.