This video provides a detailed analysis of recent Indian budget proposals, focusing on their implications for Non-Resident Indians (NRIs) and clarifying common misconceptions. It aims to offer accurate advice on tax residency, income tax slabs, new tax acts, return filing procedures, and foreign asset disclosures.
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Dear viewers, welcome to this episode of
Expert Speaks. Last week we had Nirmala
Sithar Raman, the finance minister of
our country presented her budget and she
had several proposals uh some of them
around the taxation and ones which can
have a bearing on the life of an NRA as
well. I had done the preliminary video
as soon as the budget got over and I had
told you that I'll consult my chartered
accountant and read through the fine
print to bring you what exactly matters
for you. As promised, we are doing this
video along with chartered accountant
Mr. Shiramra to bring to you what
exactly is there in the fine print. Stay
till the end of this video. We are going
to discuss many of the finer points
which were announced in the budget. This
is NR money clinic for you and I am Dr.
Chandra Khan but your financial guide
NRI money clinic no hype just the right advice.
advice.
Uh dear viewers to take you through the
budget proposals uh specifically the
ones which might affect you on a
day-to-day basis or from a compliance
requirements that you have to manage. I
have requested our chartered accountant
Mr. Shiram Ra to take through the budget
proposals and explain you what matters
for you. Chartered accountant Shiram Ra
is someone whom you have seen multiple
number of times. His partner at Nitin
Jetti and co a person who practices with
a lot of NRIs and help them solve many
of their tax queries. Welcome to this
episode Mr. Shiram.
>> Thank you.
uh Shiram when the budget gets proposed
television channels YouTubers everybody
is in a hurry to break the news who the
fastest fingers first in that den what
follows is that many times what's no
accurate information gets passed out and
there is a lot of things which is there
in the finer print so you have studied
the budget now I'll ask you a couple of
questions and please give me based on
your studies what is that has changed or
what is that has not changed first area
of interest for the NRS Has anything
been changed with respect to the
residency rules? The number of days that
they have to stay in India, are there
any changes with that effect?
>> Okay, before answering any query, I
would like to inform the viewers as well
as everyone here that on 1st of
February, what came out is only a
proposal, budget proposal and there can
be changes subject to the approval of
Raj Sabha as well as presidential
ascent. Hence there can be further
changes in this uh explanation which I'm
going to give in this uh budget proposal
video. So answering to your query sir as
on date meaning thereby in past 2 to 3
years there has no there has not been
any changes in respect of residential
status of a individual the rules
regarding 182 days 60 days 365 days in
preceding 4 years 729 days and 120 days
whatever it may be everything is
remaining the same it will continue to
be same in future years as well at least
for the next one year there is no
proposal for amendment of the
residential status which is having a
concern for any of the non-resident assets.
assets.
>> Uh are there any changes to the income
tax l any specific changes from the
budget what is presented last year?
>> No, absolutely there is no change
whatsoever. The first wild provisions
relating to stack slab for individuals
will continue the same. The old
provisions which was having a slab of 0
to 2.5 lakh 0% 2.5 to 5 lakh 5% 5 to 10
lakh and 20% and 10 to 10 lakhs and
above 30% rate of tax will continue to
be available with the deduction to be
claimed by the SSC on ATC deductions ATD
deductions etc. However, the new
provisions which will be by default
provision for everyone that also will
continue the same which was there for
the financial year 24 25 as mid year 256
it will continue the same for future
year as well that is 0 to 4 lakh 0% 4 to
8 lakh 5% 8 to 12 lakhs 10% 12 to 16
lakh 15% 16 to 20 lakh 20% 20 to 24 lakh
25% and 24 lakhs and about 30% rate of
tax that will continue the same and uh
there will be rebate also available. All
that provisions has not been amended at
all. It will continue the same. One
another announcement which created a lot
of query or curiosity is that there is
going to be a new income tax act from
1st April 2026.
What is this? Is it already done? When
will it come out? Are there any changes
in it? What is that my audience need to
know about it? There was already a
proposal in the previous budget that is
budget 2025 itself that new income tax
act 2025 is going to be announced and
launched and and bill regarding income
tax act 2025 was already been announced
on that day. Later it got amended and
the new bill came and that also got
enacted in 2025 August. So from there
onwards the new income tax act 2025 is
in effect but the procedural effect will
come only with effect from 1st of April
2026. So the year from which the first
year from which the new income tax act
2025 will come into force is 1st of
April 2026 and onwards. So for the
relevant that is this financial year
2526 that is up to 31st of March 2026
the old income tax provisions that is
the income tax act 1961 will continue
the return of income under the old
income tax act 1961 needs to be filed
for the by the SS for the financial year
2526 that is assessment year 26 27 and
that will be the last return of income
which the SS will file under the old
income tax provisions and the new income
Income tax act. Now let me come to that
as explained by the finance minister in
the budget 2025 and uh during the course
of enactment of the income tax act 2025
also that there will not be any changes
in the policy of the income tax act. Now
old income tax act will get repealed and
new income tax act will come into force.
Why this new income tax act? The
explanation given was to omit and delete
the redundant. Lot of sections were
there which were redundant. So that
which needed to be removed. The wordings
of the income tax act that needed to be
simplified so that a common man will be
able to understand. There will be tables
which is given for the ease of
understanding of a common man. So with
this intention the old income tax act
got repealed or it will effectively get
repealed from as on 31st of March 2026
and new income tax act will come into
force from 1st of April 2026. As I have
gone through the new income tax act 2026
as announced there will there is no
policy changes but section numbers have
been changed redundant sections have
been removed and the wordings the
language in which the income tax act was
written earlier that has been modified
significantly with the intention so that
a common man will be able to understand
while reading this. So there is no major
change in the income tax. WhatsApp
university is filled with all kinds of
hypothesis, projections, giving
suggestions to the prime minister, rumor
mongering. One of the things which was
making rounds was that in India also
you'll bring the husband and wife
combined tax filing. Has anything
changed there?
>> Nothing of that sort. Nothing of that
sort. I'm I'm not sure from where all
these informations are coming through.
All these are just too rumor. It's not
that easy to bring in all these kind of
you know joint return of income filing
etc. in India that is not there earlier
now also under the new income tax act
2025 it is not there so as of now there
is no such proposal also uh Mr. Shirram,
one interesting thing was about filing
of tax return. I heard that the date of
filing of return of income has been
extended. What does it mean? Can you
take us through a little bit more of
information on this?
>> Yes. Um there are two to three changes I
can highlight here. One is with regard
to filing the return of income. the
there was a hard stop on filing the
original return, belated return as well
as revised return which was getting
ended on 31st of December of every year
for the year ended 31st of March. So
there was only a 9 months window to file
the original return, belated return as
well as revised return. Now there is
some kind of leeway given to the SSE by
providing additional time for the SSE to
file only revised return. Right? So the
revised return can be filed before the
end of the assessment year. That's what
the wording says. That means there is
three additional months which will be
available for the SSE to file the
revised return even after the hard stop
of filing the original as well as
belated returns as on 31st of December
every year. So meaning thereby for the
31st of March 2025 the hard stop for
filing the original return belated
return as well as revised return was
31st of December 2025 that was 9 months
time. Now with this proposal which is
effective from 1st of March 2026 for the
assessment year 2526 that is a year
ended as on 31st of March 25 there will
be one more month 30 days 31 days of
time which will be available for the SSE
to correct any mistake they have done in
the original or related return which
they have already filed by filing a
revised return. This is for one year.
Now coming to the next year that is the
financial year 2526 assessment year 2627
SSE will get three more months time that
means for the assessment year 26 27 the
SS can file revised return on or before
31st of March 27. So the hardest stop
for filing the return of income revised
return of income will be 31st of March
every year for the SSE. So there's the 3
months time given for filing the revised
return asset. But this additional 3
months time which is given to file the
revised return will come with the
additional fee. The additional fee will
be either 1,000 if the aggregate total
income is less than 5 lakh or it will be
5,000 uh if the aggregate income is
exceeding rupes 5 lakh. So there is a
additional fee applicable but still
whatever may be the case the SSC is
going to get three more months of time
to file the revised return. This is one
amendment in respect of the extension of
the due date in respect of filing the uh
revised return. Now one more amendment
which has been given with effect from
assessment year 26 27 and onwards in
future also that is for the year ended
31st of March 2026. If an SSE who is
having business or profession income,
they will get additional time. For
example, if the SSE is filing return of
income in ITR1 or ITR2, that means the
SS is not having any business or
professional income. The due date is
31st of July. The same due date of 31st
of July is going to continue in future
as well. However, for those SSEs having
small businesses and small profession
where audit under income tax act, none
of the audits under income tax act are
applicable. They were supposed to file
either ITR3 or ITR4 for them. There will
be an additional 1 month time to file
the return of income. The due date will
get extended from 31st of July to 31st
of August. This is an welcome move in my
view because those who are running small
business or profession they were also
required to maintain books of accounts
and uh uh you know then prepare the
computation of income etc. Balance sheet
has to be prepared a profit and loss
account has to be prepared. It will take
some time for the SSE also to prepare
all that. So with this they have given
one more month of time that is on end of
31st of August to file the return of
income for all those SSEs who are having
small business operations. For those
cases where having business and audits
are applicable the due date of 31st
October and 30th of September for
transfer pricing cases will continue to
maintain. There is no change in that but
only change will be for those SSEs who
are having small business or small
profession income not required to carry
out any audit. The due date has been
extended from 31st of July to 31st of
August. Yeah, these are the two changes
in respect of extension of time for
filing the return of income.
>> What is the announcements made with
respect to filing of updated return of
income for individuals? Yeah, there was
also some changes in respect of filing
updated return but it is not relating to
extension of due date as such. The
updated return of income can be filed by
any SSE who has not filed the return of
income or revised return of income
within the hard stop time limit given
under the income tax act with an
additional income tax of 25% or 50% 60%
or 75%. Now this provision was there but
this provision was there only in those
cases where there was actual tax
liability to be discharged. Now this has
been made some modifications by allowing
the SSE who is not having the tax
liability but he had a huge losses which
he had declared which he wanted to
reduce by filing the revised return or
updated return as such. for them also
the SSC can file the updated return.
Earlier it was not possible that has
been now allowed to file the updated
return for those SSEs who were having
losses. Apart from this, the updated
return was not allowed to be filed by
the SSE where a reassessment proceedings
under section 148 of the income tax was
initiated. But the same has been
proposed to amend that there the updated
return can be filed by the SSC even
after initiation of 148 proceedings. But
the time limit would be given to under
148 uh notice within that such updated
return needs to be filed. Those are the
only two changes in respect of filing an
updated return by the SEC.
>> Uh Sham uh are there any other
amendments or announcement which has a
bearing on the NS?
>> Yeah, there are couple of amendments. I
would not say it is having a direct
impact on the NRS but it will have some
impact to the non-resident. One of them
is if a person is purchasing an
immovable property from a non-resident.
The person is purchasing immovable
property from a non-resident then he was
supposed to obtain tax collector's
account number tan not pan tan and then
deduct the TDS while making the payment
towards the sale consideration of the
immobile property to the non-resident.
Right now this provision is proposed to
be amended with the effect from 1st of
October 2026 with the ease of compliance
because this tan was supposed to be
obtained only for that one particular
transaction as such. So this obtaining
of a tan will be removed and probably
based teddious deduction for those cases
will be introduced so that the
compliance burden will be reduced to the
buyer who is purchasing immovable
property from a non-resident. So this is
an one small amendment which may have an
impact to the non-resident seller of the
immovable property. The buyer of the
imovable property will not be required
to obtain the tank. the compliance
procedure or will reduce to the buyer of
the involvement over. Now apart from
that there are couple of amendment in
respect of TCS applicability of TCS.
There is as already everyone would know
that while remitting any proceeds by a
resident individual under liberalized
remittance scheme LRS there is
applicability of TCS if the aggregate
proceeds exceed 10 lakhs. Now there are
some relaxation also in that regard in
respect of remittance towards education
or medical treatment where the rate of
TCS is 5%. Now this rate of teachers of
5% has been reduced to 2% for all those
remittances made under LRS towards
education or medical treatment. So other
remittances under LRS like if I have
borrowed a loan and then remitting
outside of India for the purpose of
education or medical then the rate of
TCS was.5%. that will continue as well
as for any other kind of remittance PCs
of 20% was there that will also continue
but only those remittances which were
for the purpose of education or medical
treatment out of their own funds made by
a resident individual for an amount
exceeding 10 lakhs the rate of TCS has
been reduced to 2% from 5%. That is one
amendment. Second thing it's a happy
news those who are going abroad towards
you know tours or uh you know your
holidays there was overseas tour program
packages for which payment would have
been made by residents for that purpose
there was a TCS applicability of 5% up
to an amount of 10 lakh rupee payment
and 20% TCS for an amount exceeding
rupees 10 lakhs for all these cases the
TCS rate has been reduced to 2%. This is
a very welcome move which will actually
boost those non I mean residents who are
taking overseas tour packages and going
for a vacation outside of India. So the
TCS rate has been reduced from 5% and
20% to just 2% whatever may be the
amount. So these are the few amendments
which are having certain bearing on the non-resident.
non-resident.
>> Mr. Shiram one another thing which
created uh news is this foreign asset
disclosure uh mentioned by finance
minister within 6 months you have to
disclose and beyond that uh nothing
needs to be done it created confusion
who should do it is it applicable for
the NRIs what is the thought behind this
foreign asset disclosure scheme can you
take us through a little bit of a
description around that
>> definitely I will explain all these
provisions with the fact from 1st of June
June
2015 black money act has been introduced
as per which if the SSC who is a
resident and ordinary resident who was
supposed to declare his foreign asset in
the return of income as well as declare
and pay the taxes on the foreign income
that he has earned during RO. If he has
missed out on declaring such thing then
it will such foreign assets or foreign
incomes will be considered as
undisclosed foreign asset and foreign
incomes under black money act that is
BMA and tax on such undisclosed foreign
asset and foreign incomes should have
been paid under black money act.
Similarly, interest penalty everything
in respect of such undisclosed foreign
asset and for undisclosed foreign income
would have attracted under black money
act. So such disclosure was supposed to
be made by the SSE in respect of foreign
asset and foreign incomes in his income
tax return in schedule FA. If you had
missed out then for all those SSEs who
are resident and ordinary resident this
scheme is the one wherein such ordinary
resident should disclose their foreign
asset undisclosed as well as undisclosed
foreign income and pay the taxes and the
fee whatever has been mentioned and come
out of it. But this will be applicable
only to the small taxpayers because the
name itself is for foreign assets of
small taxpayers disclosure scheme 2026
in short fast DS 2026. Under this scheme
is applicable to resident and ordinary
resident for any of the assessment year
1516 onwards till financial year 2424
who had foreign asset or foreign income
in any of these years and being ROR they
were supposed to declare the same in the
return of income but they have not
declared. They can declare such foreign
asset and foreign income under this
scheme and pay the taxes and whatever
the fees mentioned there. The date on
which this scheme will get effective and
the last date for entering into the
scheme has not yet been notified. Hence,
I'm not in a position to inform when
such scheme will start, when it will
end, whether the 6 months window will be
given or not. But as per the finance
minister's proposal, they are having
some 6 months time for this scheme.
During this 6 months, the entire
procedure should end. This is what I can presume.
presume.
>> So this announcement has nothing to do
with the NRA community and for them the
life will be normal like it was before. Correct?
Correct?
>> It is. Yes. If they were non-resident
for all these years starting from 1516
onwards till now then this scheme will
not have any impact on such non-resident
at all. But some non-resident were
resident during some year in this you
know in this period of 1516 till 242 25
then for them this scheme may have an
impact for example if the SSE has been a
non-resident until 1718 financial year
and after that 4 years he has been a
resident in India and again he became a
non-resident from 22 23 financial year
now during this four years maybe first
two years he might have been a resident
but not ordinary resident. Another two
years he has been a resident and
ordinary when he was a ROR resident and
ordinary resident for a couple of years
he was actually maintaining some foreign
asset but he has missed out in declaring
such foreign asset in his return of
income under BMA for every such
non-disclosure there will be a penalty
of 10 lakh rupees per for foreign asset
which has not been declared so to come
out of this provisions under this scheme
they stated that if you have foreign
assets such that which were obtained
from your sources when you are a
non-resident right you were a
non-resident at that time you had source
of income outside of India from that you
have obtained that investment or asset
outside of India acquired that and kept
that and maintained that but you were
when you are resident and or resent you
were supposed to declare that in the
Indian income tax return you have not
declared now under such circumstances to
come out of this 10 lakh rupee penalty
you can come under this scheme and
declare that asset in the scheme and pay
a fee of rupes 1 lakh when considering
10 lakh penalty instead of that paying 1
lakh is better so for those this scheme
will apply however for declaration of
such asset which were acquired when he
was a non-resident out of its NR sources
the fee is only 1 lakh and the asset
value should be less than 5 crores there
is one more set of thing. Now for
example and says he was a resident
ordinary resident from in from some
sources outside of India. He acquired
foreign asset. The source also is not
explainable or he has some foreign
income which was supposed to be declared
in India as a resident and resent which
he has not declared. For those kind of
also this scheme will apply if the
aggregate value of the undisclosed asset
and undisclosed income is less than
rupees 1 cr. So for these kind of SSES
the aggregate of tax at the rate of 30%
on undisclosed asset and undisclosed
income needs to be paid along with 100%
penalty under this act. So this scheme
is also two-faced. One is for
undisclosed asset. Another is for
undisclosed asset or undisclosed income
which were totally undisclosed where
asset was out of the undisclosed sources
also. So it is applicable to these two
set of cases and if if you if any SS
pays tax and or whatever the fee which
is mentioned under this act in under
this scheme there will be immunity from
penalty prosecution under the BMA black
money act and there are certain other
factor and circumstances and some
certain conditions that is within one
month uh the after giving the
declaration one month you'll get a
response from the officer via order
within 2 months from there on you have
to pay the fees or the amount of tax
which has been declared in the order as
well as there will be additional 2
months time given but there will be
applicability of 1% interest on that and
after payment of the taxes or the amount
under the scheme the same has to be
intimated and after that also there will
be order cost are all procedural but
this scheme is for those SS who had
missed out for making necessary
compliances and paying necessary taxes
under black money act.
>> Uh thank you Shirram for taking us
through this uh fine uh print of this
budget. Uh for the ordinary man it looks
very confusing. Most of this provision
it appears like is for a small set of
people who have either violated the law
or there is a genuine uh issue
pertaining to the filing of tax returns
and other things. My sincere advice is
don't heed to all that thing which gets
circulated on the WhatsApp. Please talk
to your chartered account and please
look into the official version of the
budget and see what is mentioned over
there. Uh don't get scared. Don't uh
send us message asking that uh uh look
uh what is the position of these things.
We can't answer each and every uh rumor
mongering which happens in the WhatsApp.
We have done this video to put the all
these doubts to the rest. If you like
this video, please do give us a thumbs
up. Share these videos with uh your near
and dear ones, friends and relatives and
on all the social media on which you are
connected with. Shirram, thank you very
much for your uh time uh and
preparations to come on the channel and
brief to our NR audience. We remain in
gratitude to you for your kind gesture.
Thank you very much, sir.
>> You're welcome. It is always a pleasure
to come on your channel. Thank you. Uh
dear viewers, please do subscribe to the
channel. Hit that bell icon. Uh don't
miss any videos from our channel. We
give you two videos every week. Thank
you very much for watching this episode
on NR Money Clinic. I shall be back with
you with yet another expert, yet another
topic next Tuesday. Till then stay safe. Jind.
Jind.
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