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Salary earned by Indian workers in Gulf exempted from tax

Finance Minister Nirmala Sitharaman on Thursday reported that salary income earned by non-resident Indians in Gulf countries would continue to be exempt from tax in India. Citing a tweet of TMC MP Mahua Moitra, Sitharaman clarified that the Finance Act 2021 has not taken in any new or additional tax on Indian workers in Saudi/UAE/Oman/Qatar.

The clause in the Finance Act, 2021, has merely included a general definition of the term “liable to tax” in the Income Tax Act to provide precision, the minister reported.

“This amendment has not altered the taxability of salary income earned by non-resident Indian citizens in Gulf countries. Their salary income earned in Gulf countries would continue to be exempt in India,” the Office of Finance Minister Nirmala Sitharaman tweeted.

Moitra in his tweet displayed a picture of an amendment in Finance Bill, 2021, saying the “complicated words” in the amendment is “in reality a Special Gulf workers tax”.

“FM going back on her words. Hardworking Indian workers in Saudi/UAE/Oman/Qatar to be taxed EXTRA,” Moitra tweeted. Sitharaman’s office tweeted: “No going back on words. The Finance Act, 2021 hasn’t brought in any additional or new tax on hardworking Indian workers in Saudi/UAE/Oman/Qatar.”

The minister also said that moving to conclusions without understanding the facts is depressing. “Further, putting out the conclusion on a social media platform not only misleads but also creates unwanted panic among people,” the minister’s office tweeted.

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