The Union finance minister Nirmala Sitharaman announced relaxation for non-resident Indians (NRIs) while presenting the Union Budget 2021, which will be effective from April 1, 2021.
Presently, when NRIs return to India, they face issues related to their accrued incomes in their foreign retirement accounts, which mainly occurs due to mismatch in taxation periods. She also highlighted their difficulties in getting credit for Indian taxes in foreign jurisdictions, leading to double taxation.
The government notified a major economic concession to its citizens living abroad, allowing them to set up one person companies (OPCs) in their home country. Until now, the facility was available only for those living in India.
This economic concession is expected to benefit a large number of Indians living in the Gulf, which has the highest number of non-resident Indians (NRIs).
As a result the Gulf-resident Indians will now be able to better plan their future for a day when their overseas work or contracts end and they have to leave their countries of limited residence to return home.
Earlier there existed the restriction that OPCs set up by resident Indians cannot be converted into a public limited company or a private limited company for two years will not apply to NRIs. Similarly, a limitation that the paid-up capital of Indian rupees five million and annual turnover of rupees 20 million, presently applicable for OPCs has also been done away with. So there are no restrictions on the growth of OPCs.
