Indians in Oman not in tax net back home

Indians working abroad including Oman are not required to pay income tax to the government of India.
A clarification in this regard was issued on Sunday by the government saying that the new provision is not intended to include those Indian citizens in the taxation net, who are bonafide workers in other countries.
Finance Minister Nirmala Sitharaman in her Budget for 2020, on Saturday, had proposed to tax Non-resident Indians (NRIs) who do not pay taxes in any foreign country.
According to the clarification issued through India’s Press Information Bureau (PIB), 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 jurisdictions to avoid payment of tax in India,” it said.
NRIs will have to pay taxes on income generated only in India, and not on what they earn outside the country, it said.
A provision in the Finance Bill said an Indian citizen, who is not taxed in any other country or territory, will be deemed to be an Indian resident.
This kicked up confusion among the Indian expat community in the Middle East including the Sultanate, which do not levy taxes on personal income. In the clarification, it said “an Indian citizen becomes a deemed resident of the country, income earned outside India 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,” the ministry said in the statement.
Sitharaman said the intention of redefining the concept of residence for tax purposes was to plug a gap that leaves the India income of NRIs out of the tax net because they do not live here.
However, the statement said, “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.”