What do the terms “liable to tax” and “deemed residency” mean to NRIs?

By: Adil Zawahir, Flywork.io Team, Flywork.io.

India has a huge number of NRIs or Non-Resident Indians living outside of India- what could the recent set of amendments in income tax law mean to them. Read on to know more.

From the 1st of April, more than 100 amendments to the Finance Bill, 2021, came into effect. The 29th amendment laid down the definition of the term "liable to tax", which is described to mean “that there is an income-tax liability on such person under the law of that country for the time being in force”. This change in law effectively makes Indians residing outside the country and making an income of Rs 15 lakh or more from domestic sources liable to pay tax. This tax liability will extend to what they earn outside as well if that global income is not taxed under any jurisdiction.

The interesting part of this amendment is that there is no statutory exception to countries that do not impose any income tax, such as the UAE. The earlier practice had provided leniency in case of deemed residency and their foreign income was exempt from being taxed in India. Post-amendment, however, income from a business controlled from/set up in India may become liable to tax in India.

Earlier, a person was only considered a resident if he spent 180 days or more in the country, or spends 120 days or more whilst having a domestic income upwards of Rs 15 lakh. The new "deemed residency" rule negates the requirement of days spent, as specified under Section 6(1) of the Income Tax Act, and any NRI having such income will automatically be deemed to be a resident of India.

This amendment to taxation laws in India had led to confusion and misdirected outrage from the public, as well as from Members of Parliament such as Mahua Moitra and Shashi Tharoor among others, on social media. This led Finance Minister Nirmala Sitharaman to clarify that the salary income of NRIs living in such countries would be exempt from taxation and the new amendment merely brought a general definition to the term "liable to tax" in the Income Tax Act. The amendment also does not seek to impact income sourced in tax-neutral countries, so long as such income does not arise from a business set up in India. This clarification will certainly provide some relief to the 85 lakh NRIs residing in the gulf region and the Middle East which does not tax income.

This amendment has definitely made individuals revisit their business models and operating structures and has compelled them to take tax into consideration for choosing their country of residence. The amendment may also give rise to more innovative methods of evasion as businessmen will look to employ the services of tax consultants and Chartered Accountants and also classifying the income generated as alternative sources of income. It has also inadvertently reduced the appeal of tax havens as many rich businessmen and businesswomen are also re-routing a part of their income through UK, Singapore and Hong Kong where direct onshore income is taxed at low rates. There is still ambiguity about the new "deemed residency" concept and this move to redirect their income could be subject to scrutiny by the Income Tax department.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.


GST Login

With the introduction of Goods & Service Tax in India (GST), several businesses have come under the tax bracket. With a huge number of GST registered persons/ businesses in the country, the introduction of the GST portal right from the beginning of the GST era has proven to be useful for all registered persons. This portal facilitates to undertake  every process and procedures which a registered person needs to perform. This starts from filing the regular GST returns and extends till applying for a refund in case of the excess tax credit is available.

First, allow us to clear some basic doubts which an individual may have with reference to GST registration:

Should every person do business register themselves under GST?

The simple answer is NO. There is no compulsory registration under GST, apart from certain circumstances as mentioned by the government. Certain situations under which GST registration may be required includes (but not limited to):

  1. Voluntary basis  (There is no restriction with registering oneself under GST without the need for it. However, it should be noted that once a person is registered, he should comply with all the procedures laid under the Act)
  2. If a person is selling goods or providing service outside the state in which he is operating
  3. If a person is indulged only in selling goods and his turnover exceeds Rs. 40 lakhs(the turnover limit varies for certain states/ Union territories)
  4. If a person is indulged only in providing service or provides both services and sells goods and his turnover exceeds Rs. 20 lakhs (the turnover limit varies for certain states/ Union territories)

Is there any benefit in registering for GST?
Certain benefits of registering under GST is as follows:

  1. Lesser compliance compared to VAT/ Service Tax/ Excise duty
  2. Regulated the unorganized sector
  3. Several benefits for small business, such as the option to opt for a composition scheme, exempt from filing annual returns, etc
  4. Business can claim a tax credit for their purchases
  5. A registered buyer would prefer to buy goods from a registered person

GST Login: How to register under the GST portal?

Follow the below steps for GST Login: Goods & Services Tax GST Portal www.gst.gov.in Login India

STEP 1: Visit www.gst.gov.in Under the ‘Services’ tab, click on the ‘Registration – New Registration’ option.

STEP 2: On the next page, click on the option ‘New Registration’ and provide the necessary details such as type of person (Tax Payer, GST Practitioner, Others, etc.); State; Legal name of the business as per PAN, mobile number, Email, etc. and click on ‘Proceed’ for OTP verification of Mobile Number and Email ID.

STEP 3: After successful OTP verification, you will receive a ‘Temporary Reference Number (TRN)’, which should be used in the next steps of detailed registration.

STEP 4: Follow STEP 1 & 2. However, this time, select on ‘Temporary Reference Number’ option as seen in the image under STEP 2. Provide the TRN and enter the captcha code. Another OTP verification needs to be done before proceeding further.

STEP 5: Under the new page, you will find the saved application. Click on the button given under the tab ‘Action’. This will take you to the detailed registration process, where the person registering needs to fill in several details and upload relevant proofs before submitting the registration application.
Once the Application Form is submitted, you will receive an Application Reference Number (ARN). Also, the application form is subject to mandatory verification in the GST portal, based on which it could get approved or rejected. Once your New Registration Application has been verified and approved in the GST portal, you will receive a 15 digits GSTIN (Goods and Services Tax Identification Number) along with a temporary password. You can start logging in by using the GSTIN number because of the User ID and therefore the temporary password which you'll reset.

NOTE: In certain cases, there could be certain fields that some more explanation or further documentary proof could be additionally required from your side. In case, some more clarification is required from you, a Show Cause Notice (SCN) Reference No. will be provided to you and will be intimated via an SMS and E-mail which you provided during the GST registration process. Alternatively, you can follow the STEP 1 & STEP 4 procedure (as given above) to log into the portal, navigate to the notification/ exact page and field where the clarification is needed, and use the same to provide relevant clarification & also to upload the relevant documents requested in the Show Cause Notice (if any)

GST Login: How to check the GST registration application status?

Once the GST registration process is completed and the application is submitted, it might take about 2 – 6 working days for the GST registration number to be allotted. Meanwhile, one can track the status of the application by following the below steps & by using the Application Reference Number (ARN).

STEP 1: Visit Government GST Login Website: www.gst.gov.in Under the ‘Services’ tab, click on ‘Registration – Track Application Status’.

STEP 2: On the next page, provide the ARN and the captcha code. Click on ‘Submit’ to look at the GST registration status.

How to login for the first time in the GST portal?

STEP 1: Visit Govt GST Login Portal India: www.gst.gov.in On the right-hand side top corner, you will find the option ‘Login’. Click on the same.

STEP 2: On the next page, below the option ‘Forgot Username’, you will find an option for the first-time login by users. Click on the same.

STEP 3: Provide the GST registration number (GSTIN) and the temporary password received by you. Enter the captcha code and click on login.

STEP 4: Now you will be required to provide a New Username & New Password for your GST portal account. Provide the new username and new password which satisfies the relevant instructions given on the page (that is, number of characters, special characters, numbers, upper case letter, etc.) and click on Submit.
Hereafter, you shall use the above Username and Password given by you for future logging into the GST portal account.

How to download the GST registration certificate for reference?

After creating an account in the GST portal by providing your own Username and Password, you can log in to your account for downloading your GST registration certificate which may be used for your future reference. The steps to download the GST registration certificate is as follows:

STEP 1: Visit Govt GST Login Portal Online: www.gst.gov.in Click on the ‘Login’ option on the top right corner. Provide the username and password alongside the captcha code and click on login.

STEP 2: On the home page of your account, you will find a tab with the name ‘Services’ on the top. Click on the same. Under same, click on ‘User Services’ and click on on ‘View/ Download Certificate’

STEP 3: Now you can find the GST registration certificate for download on the screen.

Income Tax in India (Basics)

Income Tax in India

by Nirbhay Mehta

“Nothing is certain except for death and taxes”

Some say it was mentioned by Ben Franklin, others say Mark Twain or Daniel Defoe


Whosoever quoted this has rightly put the words in place. Tax is not taught in schools or colleges, it is something a person learns while earning a regular income. A layman has no clue as to why he is bound to share his income with the government. Taxes seem inevitable and never-ending; tax system in India is frowned upon due to the complicated tax slabs, sections and compliances.


With the right amount of knowledge and understanding the basic structuring of income tax in India may help you save your income.


According to the Income tax Act, 1961 (hereinafter referred as the Act), section 2(24) defines the meaning of Income in India, with the broad understanding of the definition it mentions:


  • A salaried person, amount received from employer, in cash or kind is considered as income
  • Businessman, with the profits and income
  • Professionals
  • Rental income
  • Capital gains from sale of shares, property etc.
  • Investments


By understanding the meaning of income mentioned in the Act, one may ask as to how one can reduce the tax burden. There are two ways of reducing the tax burden.

  1. Tax avoidance and;
  2. Tax evasion


These two methods may sound similar but there are key differences between the two.




Tax Avoidance

Tax Evasion


Minimising tax liability by taking means which do not violate the rules and section of Income tax

Minimising tax liability by incorporating

illegal ways


Immoral in nature, it involves bending the law without breaking the law

Illegal and objectionable in script and moral


It is legal in India

It is illegal in India and is a criminal offence


Deferment of tax liability

Penalty or imprisonment



Income tax returns are filed under section 139 of the Act. Individuals, companies, NGOs, International companies with income incurring in India; all have different dates of filing income tax returns.


According to the current financial year, the tax slab is as under*: –



Income tax Slab (Amount in Rs.)

Tax rate for individuals below 60 years (Amount in Rs.)


Up to 2,50,000/-



2,50,001 to 5,00,000/-



5,00,001/- to 10,00,000/-

12,500/- + 20% for income exceeding 5,00,000/-


Above 10,00,000/-

1,12,500/- + 30% for income exceeding 10,00,000/-


*The above rates do not include surcharge and cess.  


  • 10% surcharge is applicable on income tax if income exceeds Rs. 50,00,000/- but it is up to Rs.1,00,00,000/-
  • 15% surcharge is applicable on income tax if income exceeds Rs.1,00,00,000/-
  • 4% health and education cess is applicable on the income tax and applicable surcharge.

Individuals having total income below Rs.5,00,000/- are eligible for full tax rebate under section 87A of the Act.

GST for Real Estate in India

GST for Real Estate in India

Akin to the country's first Jawaharlal Nehru who had given the 'Tryst with Destiny' speech at the stroke of midnight on August 15, 1947, the current Narendra Modi government also chose the midnight of June 30 to have a tryst with GST.

Real estate sector being the most pivotal ranks second just behind agriculture.

GST shall bring a lot of transparency in the real estate sector and minimize unscrupulous transactions. 

Now whether this benefit gets passed on to the end-consumer is unsure as pricing of real estate is driven by market forces than on costing principles.

Effective GST rate on under- construction real estate projects will be 12 per cent only.

The government had hiked the GST rate for the construction sector to 18 per cent from 12 per cent but removed land value from computation of tax liability.

According to Finance Minister Arun Jaitley, the products placed under the 28 per cent tax slab would not adversely impact the lower or middle class. 

Cement will be taxed at the rate of 28% under GST. It is higher the current average rate of tax around 23-24% but a lot of additional taxes charged over the average rate would be subsumed under GST.  Iron rods and pillars used in the construction of buildings is charged at the rate of 18% which is similar to the current average rate of 19.5%.
Bricks used in the construction of buildings and houses is taxed under GST at the rate of 28% except for the rate of ceramic building bricks which is kept under 5%. Currently, all bricks except the ceramic bricks are charged an average tax rate of 25-26% inclusive of all state and central level taxes. Logistics cost of transportation of bricks, cement or iron is going to reduce through the subsuming and streamlining of taxes

There is an positive & more sort of initial opening bumper for the reformative Modi Government when the
Stock Exchange Markets Hit Bright Spot.
The Stocks Opened at Above 31,000 on Monday 3rd july due to overall global appreciation of Modi Govt GST by Foreign Finance Index of Asian, US & European Countries claiming that no modern government in the entire World could ever be as bold as ours.

But, the procedures of filing returns in new GST regime are bound to be cumbersome, with businesses expected to file at least 37 returns in a year. This will be multiplied several times depending on the number of states in which one is transacting a business. 
Although this cannot be deemed simple in any sense of the term.
But, its true that,
Developers/Builder's and Contractors would reap the benefit of many taxes which will be subsumed by GST.

Conclusively saying, there is going to be a substantial benefit from GST as it will bring a lot of required transparency and accountability. 

#NarendraModi #GST #BJP #The Realty Paper 

Is Companies Act, 2013 actually Changing Fortunes?

Is Companies Act, 2013 actually Changing Fortunes?

The Companies Act, 1956 had been in need of a substantial revamp for quite some time. The 1956 Act was passed in the first decade of free India and the business landscape has changed radically ever since. The opening of the Indian economy in the early 1990s posed newer and greater challenges for the corporate world. The Companies Act, 2013 seems to focus on the factors which have an impact on the governance of the company such as risk management, due diligence, etc. In several other areas also an attempt has been made to harmonise the law with international requirements. The new Act is a modern legislation which would enable growth and greater regulation of the corporate sector in India in a rapidly changing economic, commercial and technological environment, both nationally and globally. The new Act emphasises on two concepts i.e. democracy of shareholders and supremacy of shareholders. The new Act facilitates stricter enforcement of provisions, higher levels of transparency, business friendly corporate regulations, improved corporate governance[1] norms, e-management (electronic management), enhanced accountability on the part of key management and auditors, protection of interest of investors, employee friendliness, whistle blower protection[2], and corporate social responsibility[3].

One of the major objectives behind the new Act is Shareholders democracy. It has been considered as a mode of Corporate Governance which also increases independence of shareholders with a view to make the shareholders more knowledgeable and informed about their rights. As specified in the new Act[4], all major transactions such as inter-corporate investments, guarantees, securities, managerial remuneration, related party transactions etc., need approval from shareholders. The concept of class action suits has also been introduced under Section 245 which provides for shareholder rights or protection because it gives scope to consumer organizations to bring claims on behalf of large groups of consumers.

The concept of e-governance tends to reduce paper work and provide higher level of transparency and disclosure as the important and specified documents such as financial statements have to be available on the company’s website. It also tries to promote user friendly environment by making maintenance and inspection of the documents easier, simpler and faster. The concept of e-voting and video-conferencing in meetings facilitates the participation of the shareholders and directors from around the globe and these have been introduced under Sections 174 and 175 of the Companies Act, 2013 where the quorum for the meetings of board and passing of resolutions can be achieved through audio visual means. The new Act also lays emphasis on higher levels of transparency as well as enhanced accountability on the part of key management by introducing some new regulatory bodies such as National Company Law Tribunal under Section 408, National Financial Reporting Authority under Section 132, and Special Courts for speedy trial under Section 435.

The new Act seems to be employee friendly as it mandates the disclosure of difference of salaries of the Directors and the average employees. It also gives a provision for Auditor rotation after every 5 years which will increase efficiency of the company as it will bring the books of accounts of the company under fresh eyes which may help to point out issues which the previous Auditor may not have been able to identify. Also, the Auditors tend to lose their independence after a certain period of time if they keep working for the same company as they come under the dominance of the key managerial personnel.

Making it mandatory for the audit firms to rotate is one of the measures of improving the independence, objectivity, and professional scepticism of auditors.[5] The rotation of Auditors is now mandatory not just for listed companies but for all companies including private companies covered in class of companies mentioned in Rule 5 of Companies (Audit and Auditors) Rules, 2014.[6]

Every listed or any other company as prescribed under the Act has to mandatorily establish a vigil mechanism for staff and Directors for reporting genuine concerns under Section 177(9). This mechanism needs to be established to provide safeguards against victimization of the whistleblower, who may be an employee, Superior Officer or any Designated Officer.[7] It ensures anonymity of whistle blower. The details of this mechanism have to be disclosed on the company’s website as well as in the Board’s report.

Every company having a net worth of INR500 crores or more or a turnover of INR1000 crores or more or a net profit of INR5 crores or more in any financial year shall constitute a Corporate Social Responsibility (CSR) Committee.[8] This CSR committee will formulate and recommend CSR activities to the Board. The Committee will recommend the amount to be incurred and monitor the CSR activities of the company. The company should comply with the policies of the committee and disclose the policy in the Board Report. In case of any failure, reasons have to be disclosed in the Report. The company should give preference to the local area where it operates, for spending the amount earmarked for CSR activities. This will help in improving the conditions of the weaker sections of society, in return for which the company will gain in terms of goodwill and long- term survival.

The new Act not only brings some new provisions but also strikes off some old provisions which have become obsolete with time. A large number of sections have not been notified yet and the other provisions are largely to be tested. A number of provisions still need some clarifications.

The new Act which has a number of new provisions faces a few challenges as well:

The term ‘shareholders democracy’ which sounds so fascinating is not that easy to attain. The challenge which the new Act faces is whether this objective of shareholders’ democracy is actually attainable? Also, it is not only the shareholders whose interests have to be safeguarded by the company; there are some other people also who are related to it. Any person directly or indirectly related to the company is referred to as ‘stakeholder’. Now the question that arises is will this democracy improve the conditions of non-shareholders i.e., ‘stakeholders’ such as employees, creditors, consumers, etc?

The Companies Act, 2013 has tried to change the rules of the game by providing provisions for mandatory approval from shareholders in certain cases by making them the major players, but these major players i.e., the shareholders are often ill-informed to take important decisions such as intercorporate investments, managerial remuneration, etc.

The new Act creates a doubt as to whether making CSR will actually benefit the society or will it just provide tax benefit to the companies. It can be seen now that these companies are the way for emergence of CSR consultants who help companies to make tax beneficial policies.

The companies Act has tried to change the fortunes of the companies by changing the rules for them. Now, the major questions that arise after the new Act are: Can an Act become redundant in six decades? Whether the 1956 Act has become totally obsolete? Whether the companies will be able to adapt to the new Act when it needs a plethora of clarifications? It can be hoped that the MCA and the concerned regulatory bodies will soon address such challenges to truly make the new Companies Act, an exemplary reformative step forward in empowering India Incorporated.[9]

[1] Corporate Governance: The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company – these include its shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a company’s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

[2]Whistle blowing’ is when a worker reports suspected wrongdoing at work. Officially this is called ‘making a disclosure in the public interest’.

A worker can report things that aren’t right, are illegal or if anyone at work is neglecting their duties, including:

  • someone’s health and safety is in danger
  • damage to the environment
  • a criminal offence
  • the company isn’t obeying the law (like not having the right insurance)
  • covering up wrongdoing

[3] Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.

[4] Section-185: Loan to Directors

Section-186: Intercorporate Loans or Investments

Section-188 and Rule 16: Approval and Disclosure of Related Party Transactions

Section-197: Managerial Remuneration

All the above-mentioned provisions need shareholders’ approval

[5] As specified under Section 139(2) of the Companies Act, 2013

[6] http://www.caclubindia.com/articles/companies-act-2013-rotation-of-auditors-20274.asp#.VP2gdvmUeuA

[7] As per Section 177(10) of the Companies Act, 2013

[8] As provided under Section 135 of the Companies Act, 2013