The Decocture of Taxation from an Erstwhile Resident of India upon him vacating the Country and becoming a Non-Resident : Scrutinizing the Existing Legal Stature & Need of a Conclusive Framework

The manuscript revolves around the need of a formation of a system that deduces taxes from an individual who garnered significant wealth from the country itself and has now left the country. When it comes to taxation in the country, The masses have a concoction of differential views. Some individuals and entities appropriate the existing system of taxing in a positive light whereas, there are certain people who have questionability revolving around the premise and the pragmatical aspect of it.

The system of taxation of a country is conversant with the country's legality such that it accumulates finances from salaried individuals above a certain income and gives it into the government for them to fulfil their obligations. Any high-net-worth individual who has garnered wealth from the systemised arrangement of India's economy gets exempted from paying taxes once the person becomes a non-resident. This very system poses questionability as to why there persists a dire need for such individuals to be taxed by the parent country whose clutches the person no longer is obligated to be under.

A Non-Resident who has by the advent of economical success accruing out of the territory of India if decides to leave the country shall too have certain monetary obligations i.e. taxability to the parent country. India lately has been focusing immensely on the taxability because money is the plinth of a country as well as necessitated contrivance for the smooth functioning of the country. India which already has been subject to economical atrocities can pave the way for individuals who can escape the clutches of taxability and the lack of legality may as well act as a scapegoat for it.

There is variability of instances where the individuals who have earned well decide to settle out of the territorial boundaries of the country for various reasons, bolstering with themselves the riches received from India. In this manuscript, We would discuss as to why there exists utmost need for the authorities to look into this concern and add necessary additions to The Income Tax Act.

Introduction
India despite being a developing country has certain lacunas since its inception which it steadily is working upon. India has always catered to a tolerable and arrangement sort of a setup with regard to various issues that persist in the country. Individuals who fall under the ambit of economically affluent persons after a while inherently consider living with better conditions outside India's territorial boundaries.

With the advent of colonial discourse, Indians have had an impression that the countries outside of India have better facilities with regards to various segments which may as well be practical. After garnering ample amount of consideration from our country some prominent persons who need to be absented from the garb or the clutches of the country such that they can take benefit of the profits they have earned through their profession. The fit criteria of taxation in India implies that the Non-Resident has to pay taxes upon the income accrued in the territory of India only.

There is a very recent example of cricketer Virat Kohli preparing to leave the country after his retirement from Indian Cricket and preparing to live the rest of his life abroad. Another neoteric instance includes the taxability of our very own Youngest World Chess Champion Gukesh where the finance minister of the country Mrs Nirmala Sitaraman stated that he would have to give in almost half of his prize money as tax to the country's treasury. Certain illustrations make us draw a comparative analysis between deeming the system of taxation as beneficial or arbitrary.

It is also a well-known fact that the outpourance of taxes from the citizens of the country are invested in the greater good of themselves, the government, education and infrastructure of the country which in the furtherance of it contributes to the betterment of the society as a whole. A utopian ideology of what the country should look like may as well be created but to reach the fag end of it, Money is a very necessitated contrivance. It is also no secret that the country in its entirety needs capital to function for its everyday roles, Hence the system of taxation has to be gulped in irrespective of the bitterness it may transcend. A normative ideology of any earning individual would include him/her being in charge of the finances or the dire need of the person to safeguard his/her income.

Sometimes, the facet of a certain amount falling into the treasury of the government may sound like a bitter idea but it surely carries blossoming consequences. The system of taxation in the country is progressive and proportional which imbibes various exemptions depending on the income bracket and the age of the individual. Taxation also forms future prospects which help in fulfilling long term goals of the country and to bring it in parlance with other emerging countries. Taxation in India is very flexible such that the system propagates tax avoidance too which transcends that an individual might as well use legal means to appropriate the amount of taxes. [1]

The Income Tax Act, 1961 is available for perusal for legal entities as well as lay persons to understand the statutory titbits of it, Section 2 of the Act lays down the definitions that might as well be conversant throughout the Act. [2] The entire premise of the Act portrays the advantages and functions outweighing the difficulties and hence boiling the point of taxing an ex-resident of the country and hence provisions shall be made in the same light. The entire country functions such as to garner capital in forms that benefit the country by providing its people the resources they need.

Once an individual escapes the clutches of the country, He/she might as well or not return to the home country according to the person's own conscience and choice but if such high-net-worth individual leaves, He might as well be taking with himself the aforesaid collected amount to the new country he strives to live in and might in form of expenditure spend the requisite amount and contribute to the treasury of that particular government's financial treasury.

India may as well be deemed one of the developing countries which is at its developmental stage and there are not magnanimous instances of individuals possessing amalgamated wealth. Income earned by an individual is the outcome of his hard-work, luck and other such factors intertwined together, The country if possesses such talented individuals shall preserve them and forbid them to escape the roots of the home country since the individual is nothing short of an asset for the country.

And, in the case of the person by the advent of his fundamental rights or choices decides to leave the country, He shall have an obligation to pay the home country, the taxes that are expected out of the individual even if the person does not reside there and frameworks shall be made in the same context. Contradictory views also suggest that the regulatory framework of taxation in the country has somewhat become arbitrary and overwhelming. There are certain instances of the systematic taxation being deemed as 'terrorism' leading to a new connotation 'tax terrorism'.

While the system of taxation is fairly descriptive in nature and its essence, It is to also be propagated that it should not break the spine of the middle class. There also is a lack of accountability by the government on the amounts it spends and it lacks transparency. There is a dire need to bring a parallel between systemised taxation and non-arbitrary implication of itself.

Conclusion
It wouldn't be wrong to deem that there persists a dire need to bring upon a parallel between maintaining taxability and carrying forward the country's capitalist plinth. Notable figures like celebrities and cricketers who through the love and response they received from the country, earn beauteous amounts of money shall be taxed such that they provide significant support to the country even after they have geographically shifted to some other geographical territory.

Sadly, the earning class leaving behind a small class of exempted population have to inadvertently pay a significant portion of their income to the tax department to support the country's economy whereas, wealthy and notable figures of the country find their way out of the country after earning a significant amount of wealth from the country itself. Article 265 of the holy Constitution of India mandates the extraction of taxes by only authority of law in the country which casts a positive picture and essentiality of the legal authority of the country. [3]

End Notes:

1. TATA AIA https://www.tataaia.com/blogs/life-insurance/why-is-it-important-for-every-citizen-to-pay-taxes.html. (23-12-24)
2. Income Tax Act, 1961 § 2 No. 43, Acts of Parliament, 1949 ( India )
3. INDIA CONST. art. 265 amended by The Constitution (Eightieth Amendment) Act, 2000

Written By: Devika Raj