The residential status of an individual is based on the duration for which he/she is present in India.There are 3 types of Residential status.
1. Resident & Ordinary Resident (ROR)
2. Resident But not Ordinary Resident (RNOR)
3. Non –Resident (NRI)
In this post let us understand how to determine the residential status of an NRI and whether an NRI has to pay taxes in India or not.
Residential Status – NRI or Resident?
Flow chart to know if you are an NRI or Resident. (Click here Residential status – flow chart document)
Residential Status – Calculator
Use the below calculator to check if you are an NRI or Resident.
Kindly keep the below points in mind while entering the no of days in the above calculator:
- Previous Year is period of 12 months from 1st April to 31st March. Number of days stay in India is to be counted during this period.
- Both the Day of Arrival into India and the Day of Departure from India are counted as the days of stay in India (i.e. 2 days stay in India).
- Dates stamped on Passport are normally considered as proof of dates of departure from and arrival in India.
- Keep track of no. of days in India from year to year and check the same before making the next trip to India. It is advisable to maintain a chart for the number of days stay in the current and in the preceding seven (7) previous years.
Should an NRI needs to file income tax returns in India?
Any income which arise or accrue in India will be taxable in India. This income can be – interest on bank fixed deposits,rents received from property,profit/loss from shares etc.,
So, as an NRI you should file income tax returns in India if you meet the following conditions:
- Your taxable income is above the basic exemption limit of Rs 2.5 Lakh (OR)
- You have earned capital gains (short term/long term) from sale of any investments (like shares,property,mutual funds etc.,)
- You have to claim a tax refund
- You have a home loan and want to claim tax benefits
NRI’s Income – Scope of Taxability
The sources of income for an NRI can be classified as i) Indian Income & ii) Foreign Income. Below matrix can help you in understanding the tax implications on income earned by NRI;
Income neither received nor accrued in India is treated as Foreign Income. You can ignore this income while filing your income tax returns in India.
Keep it mind that Indian Income is always taxable irrespective of the residential status.
Continue reading : ‘What is DTAA (Double Taxation Avoidance Agreement)? Is Income earned outside India taxable?‘
Hi Sreekanth,
My brother in law has gone for employment in USA on July 3, 2019. He was sent bu his company in India to the US to work on site as the company’s client is based out of US. He has gone on a 3 year visa with option for renewal. His company deducted TDS in India for salary from April to June 2018. As per Indian IT ACT, he is a non resident for this FY2018-2019 as he is employed there for more than 182 days. However, under US Tax laws (US follows Jan to Dec financial year), he has resided in US for less than 6 months, so technically he is a non resident there? My query is he can’t be a non resident in both countries for tax purposes?? So how does he go ahead with the tax filing part. Does he have to pay taxes in USA for the income from July to Dec 2018 or pay taxes in India for income earned from April 2018 to March 2019 in India??
Dear Jayesh,
He needs to follow the tax rules that are applicable to both the countries.
If he is an NRI (as per IT Act), only income from India will be taxed. He does not have to pay taxes on income earned abroad, even if he remits this income to India.
He can claim the benefit of DTAA while filing ITR.
Suggest him to take help of a CA who is an expert in NRI taxation (US tax laws).
Related articles :
* What is Double Taxation Avoidance Agreement (DTAA)? | Is Income earned outside India Taxable?
* Do I need to file my Income Tax Return?
Hi Sreekanth, I have query regarding my residency status for AY 18-19, I was transferred outside of india from Dec 1 2017 for job on secondment contract while my employment headcount was still in india , During 1 april 2017 to 1 dec 2017 I had travelled abroad for official trips for around 100 days? what is my residential status for AY 18-19.. assuming i was in physically present in india for less than 182 days but more than 60 days ..
Dear Gitesh,
If you have also stayed in India for minimum 365 days in the 4 years preceding FYs then your Residential status is Resident Indian.
i have sold a flat for 9000000 (90 lacs) and 18 lakhs has been put in pan card accountas tax. how do i claim the balance after calculating the tax
Dear Charles,
Do you mean to say that only Rs 18lakhs out of this Rs 90lakhs is a white money?
Hi. I am having an issue. I was in UAE since 6 Apr 2014. I will be arriving in India this year on 31-Oct-18. But this FY from 1 Apr till 31-Oct I spent total 188 days in India. So technically I will be considered Resident of India. However, can I go abroad in this FY for 6 days or so and qualify for the NRI status?
Hello Sir,
I was been there in india for 183 days,
No doubt , the income during I was in india is taxble.
But from Oct-17 to till date I am on resident permit in UAE.during this period my income in UAE is taxble ? Do I need to put as a taxable while filling the income tax return?
Dear Kedar,
Suggest you to kindly consult a CA who is an expert in NRI taxation matters..
after maintaining a proper NRI status for 20 years – If you stay in India for 210 days then what happens to your NRI status
Dear Jacky,
You become Resident Indian or RNOR (Resident but not Ordinary Resident).
I am a shippie and not completing 182 days this financial year.Can i file rnor
Dear Remya,
A person is an RNOR if he meets either of these two conditions: – He/she has been non-resident in India, that is, an NRI, in nine out of the ten previous years preceding that year, or – He/she has, during the seven previous years preceding that year, been in India for a period of 729 days or less.
Suggest you to kindly go through this article…
Hi… I’m a seafarer and haven’t completed 182 days outside India in the financial year… I earned more than 2.5 lakhs in the financial year, but transferred less than 2.5 lakhs (say 2.2 lakhs) to Indian banks; rest of income was taken in cash and spent outside India… Do I need to pay tax in India?
Dear JayDee,
Suggest you to file your ITR.
Please advise if i go out on international holidays, will these days counted as NRI DAYS ??
Yes dear SKS..
Thank you sir, one last query.
i m a shippy so i will take contract of 5 months on foreign going ship in this financial year and planning to do one month international holiday which would complete my 182 days of total NRI DAYS for financial year 2018-19.
hope above scenario qualify me for NRI DAYS for financial year 2018-19.
thank you for your kind advise.
Dear SKS,
Ok. Kindly use the calculator or consult a CA and plan your travel.
Hi,
I have left to Singapore for employment on 9 th March 2018.
Till today it has not been 182 days but I will stay in Singapore long term.
I want to close my PPF account, (the 15 yr tenure of the PPF account is not complete), when can I close my PPF.
Dear Kamran,
Kindly go through this article @ Latest NSC & PPF rules for Non-Resident Indians (NRIs) | New Amendments to PPF Act & NSC
Hi Sreekanth
Let me begin by mentioning that I really enjoy reading your website. You have provided a whole array of great useful information for novices like me. I really thank you for that. Now to come to my query.
I have been an NRI for the past 2 years (i.e FY 2015-16 & 2016-17) I have been out of the country the whole time. So that would make my status as NRI. The only income that I have in India is interest out of my FDs which comes to around Rs. 60,000 /- per year. I checked my 26AS and it matches and the bank has accordingly deducted the TDS on that amount. Now my question is Do I have to file my returns for this 60,000 interest income. What will happen if I dont file the returns.
I Thank you in advance for your response.
Dear Prakash,
Glad to know that you like my articles and you find them useful!
As you do not have income which is in taxable limit, there is no need to file tax return.
But, if you file ITR, you can claim the TDS as refund.
Also, the IT dept may issue compliance notice asking for reason of non-filing of ITR notice, for which you may have to respond that your income is below taxable limit.
So, to avoid this , advisable to file ITR and claim your refund.
Are these normal FDs? (interest income on NRE deposits are tax-free).
Dear Sreekanth, Thank you very much for your prompt reply. Yes they are Normal FDs, which I had booked while I was a resident 3 years ago.
You mentioned that I might receive the Non Filers notice. Is that an issue or submitting compliance will take care of it.
Dear Prakash,
As mentioned in my previous comment, its not a big issue if you have income which is below taxable limit.
But why would you like to miss your refund amount, so advisable to file ITR (as an NRI).
Hi,
I have a small clarification to know about my taxation for the year 2016-17. Let me explain my situation.
I have joined in company outside India since October 2011 – Till October 2016. and Since October 22nd 2016 i am staying in India. Let me give you exact details of my vacation no of days spent in India.
Financial Year No of Days spent in India
2012-2013 60
2013-2014 50
2014-2015 42
2015-2016 Till March 56
So in April 2016 i left back to job outside India on 19th April 2016 and then in between i came to India for emergency in September for 21 days and left the company in October 3rd and returned on 21st October 2016. Since Then i am staying in India but not having any income in India since then till now.
Please let me know whether i am taxable for my any income i earned outside India for 2016-2017 and transferred the salary money to India every month since April 2016 till November 2016. Because many are confusing with their view that some says i am not taxable and some says i am taxable. please clarify based on my query as stated above please.
Thanks
Vivek
Dear Vivek ..Kindly use the calculator given in the article and check your Residential status for FY 2016-17.
Else, you may let me know the total no of days that are in India in FY 2016-17??
in last four financial year till 2016 March my total no of days in india was 240 days. In FY 2016-2017 from April 2016 till March 2017 is 220 days.
Dear Vivek,
If you have stayed in India for more than 182 days (in your case it is 220 days) during FY 2016-17, then your residential status is Resident Indian.
So, you need to file income tax return as RI and taxes (if any) will be applicable.
Read : Do I need to file ITR?
In case, you have paid taxes on your foreign income earned during FY 2016-17, and if that country has a DTAA (Double Taxation Avoidance Agreement) with India, you can claim your taxes accordingly. Suggest you to take help of a CA.
I want like to know if there are any regulations in India, that restrict me from transferring funds between two different NRE account holders?
The underlying transaction is that I wish to acquire a commercial property in India which has been booked by another Non Resident Indian. The said property is still under construction and hence has not been registered as yet by the first buyer. He has made partial payment towards the said property and now wishes to withdraw from the deal.
Hence, to the extent that the first buyer has made payments from his NRE bank account or through the mortgage route to the builder, I need to reimburse him.
The remaining payments on the property I can pay (through my NRE bank account) directly to the builder.
I have been advised by the builder that since the property has not been registered, it cannot be treated as a “Resale” and they have no objection to replace the booking in their records to my name.
Please let me know if there are any tax or other implications that I can be subject to in the above transaction and what steps do I need to take to execute the “transfer of the booking name”
Dear Raj,
Kindly make sure they prepare new Sale agreement in your name before you transfer the amount to the first prospective buyer. Ask for the cancellation confirmation and then re-book it in your name.
As far as I know, I do not see any issue with money-transfer between NRE accounts.
(Somehow, I sense that it is advisable to book the property as a fresh booking rather than going through this route, to keep it clean and simple).
Sale Agreement is not an issue. As the Developer is quite trustworthy.
In fact, the property is now ready for Registration as well.
I have come to be aware that there could be a TDS involved as per section 195 of the Income Tax Act 1961. This is what I need further clarification on.
Section 195 states that any payment made to a non-resident by a person tax has to be deducted on the same at prescribed rates. Section 195(2) of the Act specifies that in case the person is of the opinion that the payment is not taxable in India then an application has to be made to the concerned income tax officer, who shall pass an appropriate order in relation to the tax to be deducted.
What is not clear to me is if the said process applies for payment by an Indian Resident to a Non-Resident or from Non-Resident to Non-Resident as well
Dear Raj,
In case of sale of property by NRI, it is mandatory for buyer (Resident Indian) to deduct 20.66% TDS on the sale price of the property if capital gain is long term capital gain.
Also, here sale of property is not happening between the two NRIs, am I right. So, section 195 may NOT at all applicable in your case.
You may also take advice from a CA.
Please note that both the parties to the transaction are NON-RESIDENTS having Non Resident External (NRE) accounts with banks.
Technically there is no sale or purchase happening but rather a reimbursement of the amount as the original “prospective buyer” could not continue with his purchase and is withdrawing mid-way.
Does this so called section 195 apply since both of us are NRI’s?
Hi Sir
This is a common question for lot of personnel working in Oil & Gas Offshore Industry. We are abroad for employment for more 183 days any fiscal year and we are eligible for rotational leave as per company policy, eg. 28 days work & 28 days off or 21 days work & 21 days off. We normally come back to India during our off days. However, we are confused about the criteria of “365 days or more in four years before that financial year under consideration.” If we consider above criteria then we are staying in India for more than 365 days or more in four years. Kindly advise whether we are eligible for NRI status?
Dear Thomas,
If you are staying in India for more than 60 days in last Financial year AND 365 days or more during last 4 FYs (preceding previous FY), then residential status is Resident Indian only.
Kindly note that both conditions have to be met.
Hi Sreekanth,
Fantastic article. However, I am a bit confused with the “Previous Year” calculation, as to which previous year to consider.
Let me explain my situation and hopefully you will be able to understand it better:
I went outside India on Feb, 2014 and then permanently returned to India on Aug 2016. My total stay in India during this period has been about 40 days (in trips of 15, 15 & 10).
So, to determine my NRI status, should I consider 2016 as the previous year or 2015 as the previous year?
Would the entire period of 1st April 2016 to 31st March 2017 be taxable for me or just Sep 2016 to 31st March 2017 would be taxable?
Kindly share your thoughts about my tax liability an my NRI status.
Thanks a lot.
Dear Sourin,
Current FY is 2017-18, so previous financial year would be 2016-17.
Yes in your case, PFY 1 would be 2016-17, PFY 2 is 2015-16 and so on…
Taxable or not, it depends on your sources of income.
If you have stayed in India for more than 182 days in FY 2016-17, your residential status is ‘Resident Indian’.
Hi Sree, I am Lakshminarayanan G.
My query is,
I worked in chennai(India) in the month April and May 2016 and paid income tax for those month income, Then i joined other company and working in foriegn; until march 31st of 2017 the days out side india are 167 days.
So my doubt is here, 1. whether i need to pay in come tax for the income i earned after May 31st or not?
2. Am i eligible to be an NRI in the financial year April 1’2016 to March 31’2017.
3. In case i should pay income tax, how can i calculate my income over these period.
Thank you in advance
Dear Lakshminarayanan,
If you have stayed in India for more than 182 days in FY 2016-17, your residential status for FY 2016-17 /AY 2017-18 would be Resident Indian only.
So, you need to include your foreign income along with salary received in India and file your tax return.
In case, if you have to file taxes abroad, then you need to check if that country has Double Taxation Avoidance Agreement (DTAA) with India or not.
Suggest you to consult a CA who offer service in NRI taxation matters.
Thank you so much for your prompt reply. So kind of you.
You are welcome!
Kindly share the articles with your friends and keep visiting ReLakhs 🙂
Done sree. I am doing already. Thank you.
Hi Sree,
Thanks for a fantastic article! I just want to re-confirm my understanding to avoid any surprises later, since you obviously are quite a master on the subject.. 🙂
I’ve been abroad on employment from December 2011 & will come back to India on May 31, 2017.
Qn 1: So, for the FY 2019-20, I need to consider 7 years preceding .. which means FY 2012-13 to 2018-19, right?
Qn 2: Once I return on June 01, 2017 I’ll have only RNOR status for 2 years (since I’d spent holidays in between in India). However, if I spend additional 45 days (vacation even in Sri Lanka) till March 31, 2019, would I be eligible to be RNOR for 2019-20?
Qn 3: If Yes to Answer 2, will I need to re-submit my RNOR claim status by March 31, 2019? Or, will it simply be my call to file tax returns as RNOR for 2019-20 also & submit proof, if IT Dept asks for it later?
Dear KB,
Suggest you to use this calculator to just check which Status is applicable under different scenarios..Click here..
For FY 2019-20, 7 years preceeding calculation for RNOR is from FY 2012-13 to 2018-19.
Kindly note that to qualify as RNOR, either of these two conditions can be met;
He/she has been non-resident in India, that is, an NRI, in nine out of the ten previous years preceding that year, or – He/she has, during the seven previous years preceding that year, been in India for a period of 729 days or less
Thanks a tonne Sree!
Dear Sri,
Big fan of your articles. Need a favor.
I’ve been an NRI since 1998. Moved back to India in Aug 2015. I’ve been in and out of India since though i have lived for more than 182 days in India. I still haven’t changed my NRI account back to Ordinary account. Now that i’m finally content to be in India, i’m planning to change it to ordinary account. I’m just worried that i should have changed back a few months ago as i’ve been in India for more than 182 days. On the other hand i qualify as RNOR as I’ve been outside India for more than 15 year and it gives me RNOR status for 3 years. Also, remember, i haven’t had more than 2,00,00 income overall since Aug 2015 till now so it’s not that i have avoided paying tax or anything. Tell me if it’s okay for me to change my status to ordinary resident or will i afce any problems. Thank you so much.
Dear Rohan,
Based on the info provided by you, I do not foresee any issue if you change your Residential status to Ordinary Resident.
Suggest you to consult a CA in case, you are transferring any Assets or investments from Foreign accounts to Indian Saving accounts.
Hello,
I too have a query, which is as follows:-
I am a NRI and on my visit to India (which is was less than 182 days) i thought of getting my new passport. my earlier passport had the address of USA residency but now i got the permanent address of India on my Passport, but i am still an NRI, but the problem is the foreign banks are not accepting.
My question is can you please confirm if there is an Indian Address on my Indian Passport then does that necessarily mean that the passport holder is an Indian Tax Residence.
Thank you
Dear Swati,
No, not necessarily. I can have Indian residential address on my passport and can still be an NRI.
Hi ,
I wassent to Qatar on Business Visa from August-7th-2016 by my company. Subsequently I was transferred to Qatar from 1-Nov-2016 . Till October I was getting salary in my Indian Account.
My organisation has deducted TDS @30% on my Qatar salary also starting from November .
Please suggest whether I will be able to get a refund as my stay outside India is more than 182 days.This was my first overseas visit.
Regards,
Pavan
Dear Pavan,
Let me know if your company has a subsidiary in Qatar?
Kindly note that any income accruing outside India from a business controlled in India is ‘not taxable in India’.
So, I believe that TDS on your salary from Nov 2016, can be claimed as Refund.
Our company has a Subsidary here.
However the Business Unit which I was working in has deputed me here and Started paying in Qatari Riyal from November.Salary is proocessed by same unit but currency is different.
Regards,
Pavan Reddy
does staying in srilanka counted as nri days ? and staying alone will be enough or do we need to produce employment cert
Dear honey,
Your Visa stamping is a proof..
Yes, can be considered as an NRI.
Hi,
In 2016-2017 FY, I traveled abroad more than 185 days on business trip to different countries. As part of Business trip I just got TA/DA from company and company giving Salary in Indian bank account with income TAX Cut. Please let us know how I will be identified as NRI/RI or related TAX implication.
Dear ASHISH,
If you have stayed in India for greater than or equal to 182 days then resident indian, else yoru residential status would be NRI.
Hi,
i am Seamen. In this Financial Year i went for studies 30 days aboard for my exams. Then i completed 138 days on board. Excluding in and out days from india.
now i going to join again but i will complete 182 days on board only if i exclude the joining date. previous 5 yrs i am maintain NRI status . Now ths FY Am i NRI ?
Dear sumathi,
Kindly note that both the Day of Arrival into India and the Day of Departure from India are counted as the days of stay in India (i.e. 2 days stay in India).
So, if your total number of days of residing in India are greater than or equal to 182 days, then your residential status would be RI (Resident Indian), else NRI.
Hello,
My son has gone to USA for MS under F1 visa in August 2016. Is he an NRI? If yes then what should we do to his PAN card? Should we surrender it or keep holding it? Are we supposed to inform this to IT Dept? If yes how can we do that? Also what should we do to his savings account in India? Please advise
Dear Ketan Ji,
If he stays in India in FY 2016-17 for minimum 182 days then he is Resident Indian, else NRI.
There is nothing to do with updating PAN card status. He can file his ITR (if he a tax assessee) as an NRI.
He has to inform his bankers about his NRI status. Update the status on all Deposits, Demat account, MFs, etc.,
Thank you for your response. Given the explanation above my son will have NRI status. My son is 23 now and he is not an assesse as his income never exceeded threshold limit in any FY so far.
He does not have a demat account nor does he have any holding in MF.
He has fixed deposit and interest income to the tune of 60K per annum. What will be Income tax implication, if any, on his interest income? Please advise
Regards,
Ketan Shah
Dear Ketan Ji,
If his taxable income is Rs 60k only, then filing of ITR is not mandatory.
Kindly read: Do I need to file my income tax return?
Thanks for informing.
Regards,
Ketan Shah
Dear Mr.S.R.,
Hypothetically, suppose if my son has some income in USA by doing on campus job and if he pays Income tax in USA per prevalent tax laws in USA and also has Interest income (less than RS.2.0 Lacs) in India then will he be liable to any Income tax in India?
Please advise,
Regards,
Ketan Shah
No, dear Ketan ji 🙂 .
But advisable to file ITR with NIL tax liability with NRI status (not mandatory though).
Hi,
My Name is Vipin. I am working out of India since November 2016. I know i will not be NRI for FY2016-2017. I will be out of India for more that 182 days in FY 2017 and 2018. So, do i need to pay any tax in India while i will file the ITR for FY2017 – 2018? Even if i am transferring some amount to my India account? Is this enough to get a NRI status?
regards,
Vipin
Dear Vipin,
Kindly note that NRI status (Residential status) is dependent on number of days stayed outside India.
You have to pay taxes on income derived in India if your Residential status becomes NRI.
Kindly refer to the table provided in the article.
Hello Sreekanth Jee,
I am looking forward to your expert advise on below 2 points:
PART ONE:
01/04/2004 to 12/01/2016 worked ABROAD
13/01/2016 until now in INDIA (worked for 3 months in Bangalore, TDS is deducted)
Considering the above and with my little knowledge, I think for FY 2016-2017 I am RNOR, kindly advise.
PART TWO:
– Being in NR status I have opened PPF account in FY 2006-07 and have been making contribution to it, which I think is not correct. Kindly advise what should I do here
– The PAN card I have has status as RESIDENT and is used for my resident saving account and TD and even for NRE & NRO account, which again I think is not correct. Kindly advise what should I do here
-If I operate a saving account or TD (residential) with first name of my mother and mine as 2nd name, will that be an issue (please consider both scenarios – account opened before FY 2016-17 and in FY 2016-17
– In FY 2016-17, I also have done trading in stock cash, margin buys & in MF using icicidirect portal, the point is in theory icicidirect considers me as resident. What should I do?
– Lastly on my NRE account (which is in running status but with no foreign income remittances since 2016 onwards), till what period I can continue to operate it and its related NRE TD/s. I mean kindly consider that I am in India in FY 2016-17
Looks little messed up, please can you shed some light as to what should I do…
Would greatly appreciate your valued feedback.
Regards.
Dear Alark,
only little messed up??
You have been an NRI for so long and surprised that you have not updated your Residential status on any of your investments??
Suggest you to kindly consult a CA who is an expert in NRI taxation at the earliest.
Hi Sreekanth,
Need your support in identifying residential status for the financial year 2016-17. My husband was working in UAE from July 2013 till end of October 2016. During April 2016 to Oct 2016 i.e 212 days working in UAE as per employment record however out of 212 days he was in India for 60 days for attending business meeting and vacations. Net abroad stay during FY 16-17 is 152 days but employment is for 212 days. Pls advise on the NRI status for income tax clubbing.
Dear Deepika,
Kindly note that if your husband stays in India for more than 182 days in this Fin Year (60 days + days of stay from Nov 16 to Mar 17), then his residential status would be RI (Resident Indian).
Salary slip of income from japan received by person resident in india. (amount in JPY)
Monthly paymrnts: 511334
Deduction in japan:
Social insurance
Health 21250
Pension 44570
Labour 2045
Taxable income after social insurance: 443469
Tax 13630
Deposited in bank 429839
As she is resident income from japan will be taxable in india Tax will be calculated on 511334 or 429839
Can she claim benefit of tax paid in japan -DTAA
Also can she claim benefit of rent u/s 80gg
Kindly help…………..
Dear Star..Suggest you to consult a Chartered Accountant.
Dear Sreekanth
I am a Nri from 2006. But in this FY , it is not possible for me to complete my 184 in aboard. Is my foreign income would be taxable in india.
Dear Shalendra,
Kindly note that if you have stayed in India in a FY fore >= 182 days, residential status is RESIDENT Indian.
However, if you have paid taxes on income earned from abroad sources with Foreign tax dept, you can make check if that country has DTAA (Double Taxation Avoidance Agreement) with India or not.
To avoid paying tax on same income twice , one can use the provisions of the Double Taxation Avoidance Agreement (DTAA).
Hello Mr. Shreekant, I have been out of the country on employment for more than 5 months ( around 160 days). I will be going out of the country next month for a holiday. Can that be included for calculating my 182 days?
Dear Dolly ..Yes has to be included for calculation of residential status purposes.
i have stayed in USA on H1B Visa for 45 days in Tax Year 2015 and 145 days in TY 2016 and am married. My Spouse is in India she will be coming to US on 2017 on H1B VISA .So, what is the status for TY 2016 Should i file as a Resident or Non Resident
Dear Abhilash ..Kindly download the calculator and you may check for yourself.
Dear Shreekanth,
I returned back to India in july 2016 from USA. I was working there from 1-7-2012 hardly i have travelled for 15 days a year to india.Now have came back to india .So now i have to pay the taxes on my 3 months income from April to June of USA in india as i have already paid Taxes in USA for that. AND also is there any compensation for not staying in india from last 4 years for these foreign income of 3 months?Please help me out.
Thank You,
Dear Abhishek,
Unable to comprehend your query – “there any compensation for not staying in India from last 4 years for these foreign income of 3 months?” What type of compensation are your referring to??
Hi Sreekanth,
Thanks for helping out. I am having a query. I have come to Singapore as assignment ( but indian salary stopped and joined as employee in Singapore branch ) with singapore offer letter and salary. I have alreay spent 39 days in india and now i will be going back and resuming job in India on 1st feb. So total india days will be 39+59 = 98 Days.
Rest all conditions like past 3 years , 7 years are not satisfied.
So , will i be a NRI or Resident for tax purpose ? I am working in a big MNC and when they send for long term , they transfer the employement itself to that country and that is why getting singapore salary and employment. One of the tax consultant is saying i will be covered by 60 days rule and will become resident because i am coming back in same financial year. Very confusing , please help.
Dear Rocky,
Kindly note that one has to meet both the conditions ie
Stayed in India for 60 days or more in PY (AND)
365 days in the 4 years preceding PY,
To be considered as a Resident.
Were you in India for at-least 365 days in last 4 years proceeding current FY.
Hi Sreekanth,
I am in UAE for Employment for last 3.8 years since April 2013, and coming back permanently after cancelling my Visa in Dec 2016. In current FY, my stay in India would be 105 days. As per your flowchart, my resident status will be NRI. Right ?
Thanks
Deepak
Dear Deepak,
If you satisfy both these conditions;
Stayed in India for 60 days or more in PY (AND)
365 days in the 4 years preceding PY..
Then yes, your residential status would be NRI.
How many NRIs visit India in December and January numbers or percentage. eg 15 lakhs or 30% of the total NRI come in a year.
Hi Sreekanth,
I am in Australia from 2-july-2016(Travel from india) to 31 Dec-2016( Leaving Australia) (No of days= 182).
Could you please let me know should I need to pay tax in India as well or should I stay in Australia for next 4 days (4-01-2017) (No of days=186)
So , I can save my tax.
Please advise me on the same.
Dear Ajit,
If you stay out of India for more than 182 days then you need to meet the other two conditions as well.
Stayed in India for 60 days or more in PY (AND)
365 days in the 4 years preceding PY
Kindly check this in the Flowchart. Even if your Residential Status is NRI, any income from sources in India, can be subject to taxes (for ex- rental income in India).
Hi, If I join a company in Dubai in December 2016, will I be adding my salary earned there and deposited directly to my Dubai account to my salary earned in India from March 2016-November 2016 for determining income tax? UAE income is tax free, but cost of living is high. Is there any provision of deducting the cost of living from India taxation?
Dear Arjun,
If your Residential status is Resident Indian for FY 2016-17, then you have to club both the incomes and pay taxes (if any).
My husband in working abroad since jan 2016.He visted India from 8th july 2016 to 10th September 2016…he will bw visiting again for 14 days in jan 2017.Is his status NRI…also he transfered dollars in my account just the day our prime minister declared about our 500 n 1000 rupees ban…also he has transfered amount more than 2.5 lakhs…is all this amount taxable to me….he is a joint account holder with me.Do we need to fill his income tax returns..please advice.
Dear Tujender,
Kindly use the calculator available in the above article to check the Residential status.
You may consider the transferred amount as Gift.
Read: Gifts & Tax implications.
Have you been filing Income Tax return?
Whether you husband has to file returns or not? – It depends on the residential status, income earned in India etc.,
Hi Sreekanth, I am working in London from Apr 2014 onwards and have NRI status for last 2 FY and did not pay any IT in India. I stayed in India for about 35 days in last FY (2025-16). I am planning to come back for good to India in Dec 2016. Can you pls clarify if i do not need to pay tax for salary earned from Apr ’16 – Dec ’16 in India. My understanding is that I will have to pay tax only for the salary i will earn in India from Jan ’17 – Mar ’17. Pls confirm
rgds, Ananth
Dear Ananth,
It depends on whether your Residential status would be RI or NRI for this FY 2016-17.
If you are NRI for this FY, yes your understanding is correct.
Hi
That is what I want to find out and get confirmation.. My current status is NRI as I am getting paid in UK atleast until Dec. If I return back to India in Jan, would I still be considered NRI for this FY and pay income tax only for the income from Jan to March 2017
Dear Ananth..Kindly use the calculator to determine your Residential Status.
Dear Sreekanth , i have the following queries about my income tax filing in India for AY 15-16
I worked in overseas from Jun 2003 to May 2014 for Overseas based company as a permanent resident there . and returned to INDIA and started working from Sep 2014 from different firm in India.
Can you clarify the following?
1. As per calculator I am not an ordinary resident, NOR. Is it correct?
2. I worked in Overseas Apr and May 2014 and did not pay tax as I did not stay more than 182 days at their country for assessment year ,As peer NOR status ,do I need to pay income tax in India for the same ?.There is no link between India and the firm where I worked in Overseas,
3. I have closed my overseas PF account and settled the same to overseas bank account and transferred the same fund to my NRE account by me ,is this settlement is taxable for NOR ?
4. I have sold my overseas property in overseas and the same settled to my overseas bank account, Is this taxable for NOR (not an ordinary resident) .
5. I have created few NRE deposit which is maturing in 2017,, interest on NRE deposit is taxable for NOR ?,if not then how long tax free ?
Thanks
Dear Sellappaen,
1 – Yes. This is essentially a transitional status between being an NRI and becoming a full-fledged Resident. An NRI, in nine out of the ten previous years preceding that year, (or) He/she has, during the seven previous years preceding that year, been in India for a period of 729 days or less is considered as RNOR.
2 – I believe that Income received and accrued outside India from a business controlled or set up in India is taxable in India, even for an RNOR. It is not controlled, then not taxable.
3 – I believe it is not taxable. Kindly note that the RNOR is a special status accorded in order to provide some benefits to returning NRIs.For Indian income tax purposes, an RNOR is treated at par with NRIs.
4 – Not taxable.
5 – Did you convert the accounts into Resident account or Resident Foreign Currency (RFC) account?
Kindly note that I am not a tax expert and hence advisable to consult a CA related to these matters.
As per the Income tax Act, 1961: Indian residency status is defined as per the below given criteria.
a. Person is in India for 182 days or more during the current financial year. OR
b. Person is in India for 60 days or more in the current financial year and for 365 days or more in the preceding four financial years If the person departs from India on a long-term assignment, then the residency status is as per point (a).
If the person returns to the India, then the residency status is as per point (a) or (b) whichever condition is satisfied.
-Sridev Bhavanandam
I am resident canadian and filling taxes in canada ; further since my stay in India is more than 183 days , f my income from abroad will be taxed in india . As per DTAA rental income and pension income in canada can be taxed in Canada only . Please clarify.
Thanks
Dear RAKESH ..I do not have the required knowledge specific to Canada – India DTAA agreement.
Kindly consult a NRI tax expert.
Dear Mr Sreekanth,
I would really appreciate a reply to this if you would.
My husband and I are Indians living in London since July 2012. I am employed full time while my husband is employed on and off. We have traveled to India frequently in the last few years.
I have recently been laid off and have to return to India in a few months with my husband. In this financial year I was employed from April 1 – August 16. My husband will be employed from August 17-October 20. We intend to return to India on November 20.
I have spent 13 days in India in FY 2016-17. My husband has spent 33 days in FY 2016-17.
Will we have to pay taxes on our UK income in India in FY 2016-17 on our return?
Please do reply.
Dear Natasha,
Suggest you to kindly first check your Residential Status using the above calculator.
If your status is NRI for FY 2016-17, then there is no need to file taxes for your foreign income in India for FY 2016-17 (AY 2017-18).
If your status is RI then, you have to pay taxes in India, but if you have paid certain taxes on foreign income in UK then you may have to pay only differential tax rate in India (if UK & India are part of double taxation avoidance agreement).
Suggest you to consult an NRI taxation expert.
Hi
Suppose I return to India in June and am then a Indian resident (no longer NRI), will my income abroad (salary earned in the months April to June of that year) be taxable in India ? Do I have to declare it in my return ?
Thanks
Dear Ashok,
For Resident indian, income from abroad sources is taxable, but if you have already paid taxes in the foreign country and if India has double taxation avoidance agreement (DTAA) with that country, then you need to pay only the differential tax rate on such income here in India.
Hello Shreekanth,
I have 2 queries.
1. What happens to an NRE Account once the NRI returns to India for good? I am told that the NRI status is valid for a period of 7 years and funds in the NE Acc are non taxable for that period. Can you confirm?
2. What about investments such as metal funds & shares that were invested through the NRE Acc? Is there capital gains tax on these after I have returned to india for good?
Thanks.
Look forward to hearing from you.
Regards
John
Dear John,
NRI benefits are available to an individual till the time he/she holds the NRI as residential status. A person loses his NRI status in the same year when he returns to India or within 2-3 years from the date of arrival to India, depending on the number of days of stay in India (explained in the article).
Immediately on return to India, NRIs should inform their bank to designate their accounts as domestic Resident accounts or transfer the balance in their NRE/FCNR accounts to Resident Foreign Currency (RFC) accounts, if so desired; FCNR accounts can be continued till the date of maturity and upon maturity, can be converted to RFC accounts.
NRI status is not valid for 7 years but one can re-invest or repatriate the balances or amounts or assets in abroad to india over the next 7 years (This exemption period is limited to 7 successive years which immediately follow the year in which the NRI permanently returns to India.)
Suggest you to consult a CA or NRI taxation expert.
Hi Sreekanth,
Could you please let me know what is the Previous Financial Year I should consider in the calculator?
“No of days you were in India in the Previous Financial Year” = 2015-2016 or 2014-2015
I’m Out of India from Oct 2014 till now, So I need to understand what exactly will be the Previous Financial Year.
Dear Bhagyashree ..It is 2015-16.
Hi,
I started working from 2010 and was in India from 2010 to April 2013.
I got a job in West Africa in May 2013 and use to work on a roster. 6 weeks in Africa followed by 2 weeks in India.
I sometimes did more than 6 weeks, so my total stay in India was never more than 182 days.
So basically 2013 – 2014, it was around 100 days in India, 2014 – 2015 again the same.
I lost the job exactly in March 31 2015 and have been unemployed since.
How will be my taxation structure ?
I received my salary in NRE account and no income arised in India.
The whole money in my NRE and NRO is a result of income from my job in West Africa.
I am quite confused, can you help me please ?
Dear Rahul ..Your income earned in W.Africa will not be charged to tax if your residential status is NRI.
(Assuming you do not have any source of income here in India).
Hi
I am workinhg outside india in merchant navy and staying outside more than 185 days my salary is not taxable?which itr form i need to fill up?
Dear Rohit ..It depends on source(s) of income . Kindly read: Which ITR form to file?
I visited Oman on 27 September 2015 for job and working till date
Meanwhile I visited India for 20 days to meet my family. So my stay in india is 180 (1 April-27 September) +20 =200 days
So what will be my status? Should I have to pay taxes on my income earned in Oman?
Dear Ganesh,
Your Residential status for FY 2015-16 is Resident Indian.
So, income earned in India or abroad is liable for taxes.
However, if you have already paid taxes in Oman on ‘abroad income’, and if oman has DTAA (Double taxation avoidance agreement) with India then there is no need to pay taxes (abroad income) in India again.
Suggest you to take help of a CA.
Hi Sreekanth,
I am a merchant navy officer (NRI) and is working in foreign going ships from 2011. I have not met my NRI days of 180 days abroad criteria for the year 2014 alone. Could you pls advise if i should pay my taxes for the year 2014? & pls advise if i should be filing my taxes?Kindly Advise
Dear NEERAJ,
If you were Resident Indian for FY 2014-15, then suggest you to file ITR (if there was taxable income).
Kindly note that you can not claim Refund (if any) now.
Hello Srikanth,
I moved to US on a L2- Dependent Visa on July 15, 2015. What will be my residential status in India for FY 2015-2016? Also, I started working in US (for a US based company) since Feb 29, 2016 and I am paying tax in US. Should I pay tax in India for the salary earned in US from Feb 29-Mar 31, 2016?
Dear Ramya..Kindly use the calculator provided in the above article and find out the Residential status.
If you are an NRI, then no need to pay taxes on foreign income.
Hi,
If someone has moved from India to Dubai (to join a Dubai based firm) in Nov 2015, what happens to his income that he earns in Dubai from Nov to Mar? Will it be taxed in India for FY15-16? Won’t DTAA come into play in this?
Thanks
Dear ST..DTAA comes into picture. The foreign income will not be taxed. But kindly read the points given in the above article.
Thanks.. I read the above.. But I am not clear on one thing.. The stay qualifies as Indian Resident.. So the last 4 months of the year, Dec to Mar, foreign income will not be taxed in India owing to DTAA right?
Dear ST..If residential status is RI, he/she is liable to pay taxes on foreign income too. But if one has already paid taxes in foreign country then he/she has to submit documentary evidence of such tax payments to AO.
So if any tax paid in Dubai on income earned will be exempt in India depending upon the DTAA agreement
Hi, If a person went USA on work visa on perment basis(i.e.salary also receiving from USA payroll) from march 2015 but again he came to india and stayed in india around 90 days in between june 2015 to dec 2015 in purpose of USA company assignment to india company but not recieved any income from india company and also not recieved any allowance, in this case for FY 2015-2016(assessment year 2016-17) will he be treated as NRI?
Dear Anu..Suggest you to kindly use the provided calculator to check the Residential status.
Hi Sreekanth,
What is the exact difference between ROR (Resident and Ordinary Resident) and RNOR(Resident non ordinary Resident).
Thanks in advance.
Dear Mahesh,
Resident and Ordinary Resident (ROR) means a person who was either in India during the whole of the Financial Year or for a period not less than 182 days, where as if any resident who was not a resident and ordinary resident in 9 out of the 10 previous years he becomes Resident but RNOR.
For more details ..kindly read this article, click here..
hey sreekanth, i have business that is setup in singapore. i will be moving to india soon. As rnor, will my business in singapore or dividends that i withdraw from the company be taxable in india. It is a digital marketing company so all the income is online. i am worried about the place of control of the business
Dear Nehal,
I believe that ff the business entity is registered in Singapore, and income accruing or arising outside India, is not taxable in India. I believe local (SG) taxes are applicable. Kindly check on this with a CA too.
Dear Sir,
Following is my foreign trip details –
Departure from India – 24-May-2015
Current Location – Still onsite(Outside India).
I went on small personal trip to India for 10 days on vacation in Dec -2015.
Please tell me the residential status for F.Y. 2016-17. Is vacation days will be considered during calculating residential status or not? during this time we got salary only from foreign branch.
Thanks and Regards
Vineet
Dear Vineet..Suggest you to kindly use the calculator provided in the article.
Dear Sri,
I am PIO and came back to India in FY 2003 – 2004. NR in that financial year; NOR for 2004-2005 & 2005-2006 and thereafter Resident for tax purposes. In FY 2015 – 2016, I was out of India for 191 days. What will be my residential status in FY 2015 – 2016, given I am a PIO. Best regards
Dear Samtani..I am not sure about your case. Kindly consult a Chartered Accountant.
Dear sir,
I have confusion about my NRI status.
Recently, i have heard that NRI not eligible to PPF account,
I left India 19 Feb. 14 and back to India for 20 day on 01 Dec 14, During this visit i had open New PPF acount on 17 Dec 14.
During 17 Dec 14, what was my NRI status, and PPF Account legal or not
Thank you,
Rikes hPatel.
Dear Rikesh,
A resident-turned-NRI is allowed to invest in the PPF account from his/her non-resident ordinary (NRO) or non-resident external (NRE) account till maturity.
He/she cant extend the tenure after the mandatory 15 years’ lock-in period.
Hello Sir,
I am currently onsite in Germany. But it us scheduled that I will be joining in India 3rd OCT 2016. But due to family reasons I had travel short trips to India, and back to Germany. In this case will be taxed in India or not?
Thabks in advance.
Dear Raviraj,
It depends on your residential status for this Financial Year. Kindly use the calculator provided in the article and check for yourself.
I am working out of India since July 2005 and have not stayed in India for more than two months in any of the financial years.
I am likely to return to India in August 2016. Will I have to income tax in the current FY2016-17 when I return in August?
If yes, then how can I save the tax?
Dear Chandra,
If your residential status is NRI for FY 2016-17 then you may not be required to file taxes.
Do you have any income from the sources which are in India?
Read:
List of income tax deductions for FY 206-17.
Hello Shreekant,
I wanted to ask about tax on income earned while working abroad from April to August 2016. I have been working here since July 2005, but may have to return now. There is no income tax here. I don’t have significant income in India.
If I have to pay tax on foreign income, then are there any other concessions? Standard of living here is much higher here. So do I get more standard deduction than resident Indians?
Thanks and regards,
-Shekhar.
Dear Chandra,
If your residential status remains NRI for this FY and you have negligible income in India (below basic exemption limit) then you may not be required to pay any taxes in India.
I believe that there is no such provision wherein income tax deductions are linked to standard of living/cost of living.
Hello Sreekanth,
As I said I am likely to return in August and unlikely to get a foreign job again in near future. Since I am NRI for almost 11 years now, will I remain NRI even if I return in August and don’t go back? Will I be RNOR and as RNOR will I have to pay tax on foreign income earned from April to August?
Thanks and regards,
-Chandra
Dear Shreekanth,
Please help me know my Residential Status with following data. I stayed following days in India on vacation (with no income generated in India)
FY2011-12: 216 (Left India for employment in USA on 2 Nov 2011)
FY2012-13: 0 days
FY2013-14: 83 days
FY2014-15: 0 days
FY2015-16:40 days
I will be returning back to India on 1 Oct 2016. My payroll will start in India on 1 Oct 2016. From 1 April 2016 to 30 sep 2016, I will be staying 183 days outside India (USA).
1. Will that retain my NRI status to file taxes for FY-2016-17. I will be paying my taxes in the foreign country (USA).
2. If I travel for 10 days on vacation to India before between 1 April-1 Oct 2016, will I have to pay taxes for all the income earned in USA from 1April 2016-30 Sep 2016? Is vacation period with no income generated in India considered as part of 182 days? Will have file taxes as Resident in this case?
Technically I have stayed 315 days in last 5 Financial years, will I be able to retain the NRI status for filing taxes in India for 2016-17. I will have to file taxes for income generated from 1 Oct onwards, but will I have to pay taxes for income generated in USA prior to coming to India?
Much appreciate your help to clear my confusion.
Thanks
Dear Rupesh,
1 – As of now your Residential status as pr last few years data is NRI.
2 – In case if you stay for 182 days (greater than or equal to 182) in India for in FY 2016-17 then you will become Resident Indian. So, it may all depend on the num of days that you are going to stay in India in this FY.
3 – If you become Resident Indian then you have to pay taxes on all the income earned by you. But if you pay taxes in USA you can submit those papers to Assessing officer in India to avoid paying the taxes twice (kindly refer to Double Taxation Treaty).
Suggest you to consult a Chartered Accountant and file your taxes for FY 2016-17.
i m having NRE accounts but from last 5 years i couldn’t maintain my 182 days in each year as required by NRE status. i m working on ship getting salary in dollar but never work in india even not recieved indian money in my account.
do i need to worry about Income tax related / submitting some thing to Income tax deptt.
do i need to fill some Income tax returns/any thing else with Income tax.
Dear pratap ..Do you mean to say that your Residential status has been Resident Indian for the last 5 years and you have not filed Income Tax Return?
dear sir,i have opened NRE account December 2014 and i am sending amount from abudhabi to India in my NRE account.now i have to move from abudhabi to India permanent and i got mail from bank about submit for KYC proof ,menace bank asking new visa proof for KYC but my visa till not expired up to june29 2016 have a veiled.now i dint want renew my visa, so what will happen my FD and other amount when my account will be transfer to resident account.please advise me. any Interest tax on my running FD and what about my transferred amount from abudhabi to india on NRE income it will be taxable? because i want continue invest in same account .please
Dear manthan,
I believe that till the time your Residential Status is NRI, you can continue getting tax-free interest income on NRE account. But as soon as your status changes, you need to inform to your banker and convert it normal savings bank account.
DEAR
MY WIFE IS ALSO NRI , SHE HAVING NRO FD INCOME THIS YEAR BUT IF NEXT YEAR SHE DONT HAVE NRO FD INCOME SO SHE NEED TO FILE ITR OR NOT.
AND PLEASE TELL ME WE CAN FILE ITR ONLINE INDEPENDENTLY OR ITS NECESSARY THR. CHARTERED ACCOUNTANT BEACUSE CHARTERED ACCOUNTANT IS CHARGING ME INR 3500/- PER YEAR PER PERSON I THINK THIS IS HIGH PRICE FOR ONE YEAR.
PLEASE REPLY ME ON EMAIL ALSO.
THANKS N REGARDS,
Dear NEERAJ..Kindly refer to our chat on FB.
Dear sir i am a marine engineer and i completed my NRI status financial year 2015-16 of 181 days . if i go to sri lanka and complete 3 days before 2016 March, I am eligible for NRI status and be exempted from tax paying
Hi SR,
I am living out of India since Feb 2013 and have earned some interest in NRO bank accounts now. In my case it comes out to be a refund from Indian Tax Department. Hoever my PAN is still has Resident status. So in order to claim the refund from the IT deptt do I need to get my PAN status as NRI first then apply for refund via filing.
Or I can still file a refund without changinb my PAN status.
Please guide me
Dear Tushar..Yes you have to get your Residential status updated and then file your ITR.
Hi,
I will be moving to US on a US payroll and getting US salary on 1 June 2015 and would be in US till 31 Dec 2016 (210 days). Then I will come back to India on 1 Jan 2017.
Would I be treated as Tax Resident of India for Financial year 2016/2017 or not?
I am bit confused on the statement that in case of an Indian citizen leaving the country for taking up an employment overseas, the clause of 60 days is replaced by 182 days.
Please advise.
Dear Sundeep,
Is it June 2016?
I believe that your status would be Resident Indian as you are going to come back to India.
Kindly use the calculator to assess your Residential status.
i am NRE account holder for last 15 years but i have FDS in my name.In 2010 i came to india but my account still is NRE account account. i have still my FDS in NRE. but recently i came aboard in gulf. and after one year my FDS r geting matured. do i have to pay taxes on interest i earn on those FDS. its in SBI bank. they send me one letter from RBI called FACTCA . but right now i m not in USA. what does it mean.
Dear victor,
If you had become Resident Indian, you should have updated your bankers about your Residential Status.
Are you an NRI or RI now?
Kindly read about : FATCA Compliance requirements..
SIR I AM WORKING IN SAUDI I HAVE ROTATION JOB 35IN SAUDI AND 35 DAYS OFF IN INDIA
I NEED TO PAY TEX IN INDIA
SIR I AM PAYING TEX EVERY MONTH IN SAUDI. STILL I HAVE PAY IN INDIA .AND I AM STAYING LESS THEN 180 DAYS OUT OF COUNTRY
Dear Deepak,
If you are an NRI, I believe that there is no need to pay taxes in India on the income earned in Saudi.
However, the income earned (salary + other sources of income) in India is taxable here.
I was working in Middle East in last two FY but came back to India on 17 th Aug 2015 to join the company in india So will my income earned from 01 st Apr 2015 to 17Aug2015 in Dubai , be taxable in india?
There is no income Tax in Dubai.
what is the solution to avoid tax on foreign income if it is taxable in india. In between 17 Aug 2015 and till today , I have travelled to other countries on business visa of company ,where i am working in india, for 30 days. Will more business visit help to save tax? As of now I have completed 165 day out of india.
Please help urgently so that I can arrange business visit if it is required to complete the 185 days out of india for FY 2015-16
sorry not 165 days it is 163 day becuase day of departure and arrival is part of 182 day rule.
and additional info while working in Dubai, i came to india from 11th Jun 2015 to 16Jun 2015….i think that will also be considered as in india as per 182 days rule.
Please help.
Dear Arvind,
Kindly note that even if you try to maintain the NRI status for FY 2015-16, any income received in India during the FY will be taxable in India.
I believe that you need not worry about the income you received in Dubai in FY 2015-16.
Will Dubai income not taxable in india for FY 2015-16 even if i stay more than 182 days?
Dear Arvind,
Yes if you stay for more than 182 days and your status is Resident Indian then you need to file both Indian + Dubai income in your ITR.
Dear sir, i completed 169 days this year for NR E status. What can i do to complete 183 days before financial yer.
Dear Narendra..I have replied to your email. Kindly check it.
Dear Sir ,
I am working in Hongkong , but in this financial year ( 2015-16 ) not able to complete the min.requirment of 182 days .
In such case my income in Hong Kong will be taxable in India ?
please comment.
Dear prashant..You may kindly first check if you are an NRI or not by using the calculator (key in values for Previous Financial Years too).
Hi
Thanks for your feedback.
actually I moved to HK in November 2015 ,hence I will not able to complete my stay of 180 days till 31st March 2016.
In such case my income in HK ..will it be taxable ,
if I send this money to India through HK bank to Indian Bank a/c? Then will it be taxable in India ?
Please comments
Thanks
Dear Prashant..If you were in India prior to Nov 2015, then your residential status can be ‘Resident Indian’ for FY 2015-16. In such a scenario, it will be taxable in India. Are you paying any taxes in HK on the income earned?
I get the salary in HKD only
I will pay my tax end of the year in Hong Kong.
In such case it will b taxable in India.
Thanks
Prashant
Dear Prashant..In case if tax gets deducted in HK, you may not be liable to pay taxes again in India.
There is something called Double Taxation Avoidance Agreement (DTAA), kindly check if India & HK are part of DDTA, if so you can submit the tax paid proofs in India (to tax assessing officer) that you have already paid the taxes and do not require to pay one more time in India.
You may take help of a CA.
(I believe that both the countries have signed the DDTA).
Thanks a lot for your guidance
Regards
Prashant
Hi Sreekanth,
Very nice & informative to read your blogs and your replies.
I would like to know if a person is employed abroad and he/she discharges his employment duties onboard a foreign flag ship, all the source of income is coming from the foreign employer into the NRE account in India, will the person be still considered as NRI even if he fails to make 183 days abroad.
For the sake of argument if he stayed abroad for only 160 days in a FY year will he has to pay tax in India for the income earned through his employment overseas?
Dear Srikanth,
I believe that in this scenario the individual will be considered as NRI for taxation purposes.
Are you paying any taxes in abroad?
You may kindly go through this article..click here.
Hi Sreekanth
Thank you for the article. Most of the time we are signing off the country and join the ship and work onboard for 5 weeks (oil exploration surveys). The employer says if they have to pay taxes they will pay on our behalf in the country of assignment. Except in developed countries like Norway, USA, etc. the company has to pay taxes on behalf of the employee. Many times there is no need to pay taxes as we are working offshore.
Dear Srikanth.. Yes even I too believe the same.
Thanks for informative article.
My residential status for FY 15-16 is NRI, but I have stayed in India for 5 months.
Few queries if you can help-
1) The 80C deduction is available fully or in proportion to my stay in India?
2) I have a house and pay EMI for it. Will only 5 month’s EMI be considered for the 80C exemption? Or the EMI which I paid during my stay abroad will also be considered for exemption?
Dear Amit,
1 – Fully (up to Rs 1.5 Lakh)
2 – Full (however normal aggregate limits apply)
We are buying flat from a seller who in our case is carrying USA Passport
He is claiming to have spent more than 365 days in india in last four years
and this year residing more than 182 days in india
He is sharing his last two years income tax return with resident status
and his pan card
He is saying he should be treated as an resident indian and is not covered under section 195
How I can safeguard myself
Sir please revert as it is very important for us as we have already given the biana
Dear navdeep,
Suggest you to get this deal done through a lawyer or a Chartered Accountant.
Hi Sreekanth,
In FY(2014-15), I stayed in India for 181 days. I worked for an Middle East company and the salary was received in Middle east only but during my stay outside which was 184 days , I visited India on personal visit to meet my family for 10 days though that time no salary income was earned in India. I need to know as I was in India for less than 182 days then should I file my residential status as NRI or Resident while I file ITR.
Dear Vivek,
If you have not stayed in India for atleast 182 days during the Financial year 2014-15, use the calculator that has been provided in the article by keying in the other data and you may check for yourself about the Residential Status.
Hi Sreekanth, would you happen to know which section of ITR2 should an ROR use for entering information of US-based IRA (Individual Retirement Arrangement)?
Dear Duseja..I believe it can be shown under ‘Schedule FA’.
Hi Sreekanth,
I am NRI with non-resident status. Whereas my wife is resident.
We have a couple of joint savings account in USA. Source of income was all mine in those joint accounts.
Does my wife need to disclose these joint accounts in her ITR-2?
Thank you.
Dear SS..I believe that it is not required.
Dear Shreekanth,
I returned back to India in Feb 2014. My Current status is RONR. I was holding some FD’s As NRE FD’s. These Are Maturing in FY 2014-2015. From various comments above I consider that The interest I received on these FD’S is tax exempt. However if any FD is opened after return to India the Interest on these FD’S would be taxable. All FD’s are Rupee account. Please confirm my understanding.
Thank You,
Dear Jagdish..Yes you are correct. Also, you need to update your bankers about your current Residential status.
Thank You,
Jagdish
First of all a very good blog, Sreekanth.
I came to India from US in mid Oct 2014 and my status is Non-resident for Indian fiscal year 2014-2015.
My wife is resident since last 2 years.
Since in India, we should be filing Individual tax returns, do both of us need to show the US bank accounts in ITR2s.
We have a couple of bank joint accounts, joint brokerage account and also individual tax saving accounts (401k/IRA).
Do we both need to show joint accounts also?
Also for taxation purpose, do I need to show my non-resident overseas salary as well?
How about interest and capital gains from Bank/Brokerage accounts? Who need to show what in ITR2 and also income for taxes.
Sorry for a long question. Your comments are appreciated. Thanks.
Dear SS,
If you are filing as an NRI, no need to show foreign income or overseas salary. you have to show the income that is received or accrued in India.
Whereas, you spouse being a Resident Indian, has to show foreign income (if any).
Hi Sree,
I came to US on 1st Dec 2014. So by 31st March 2015, I didnt complete 182 days. As of today I attend the status of NRI. So should I be filing as NRI or Resident?
Do you have any idea about Schedule FA from ITR2?
Or any link which can enlighten about Interest Accured/Interest Taxable/Schedule where offered/Item number of schedule.
Thanks,
Abhi.
Dear Abhijeet,
For how many days were you in India between April 1, 2014 to Mar 2015?
Hello SreeKanth,
I am an NRI for FY 2014-15. I don’t have any income above exemption limit in India. I have one house in India and own house in Foreign country. I am confused which ITR form to fill. If ITR-2, do I need to declare my Foreign Bank accounts, Foreign property and Foreign Salary income.
Appreciate if you can help me in this regard?
Dear Abhipray,
I believe that you can file ITR 1.
The said rules are applicable for Resident Indians.
Hi Sreekanth,
I came across your article researching NRI taxation for 2015. I saw in the new ITR 2 form there is a section for providing details about foreign bank accounts and assets. I and my spouse are both green card holders and are both working in the US. We qualify as NRIs and even though our taxable income is well below the exemption limit, we want to file income tax return in India for continuity. My question is – do I need to declare all my assets in the US (bank accounts, property, salary details, US tax returns) in the new ITR 2 form?
Dear A,
It is not required, applicable for Resident Indians only.
Thanks for the quick reply Sreekanth.
Hi Sreekanth,
Thanks for the informative article.
I’ve to file returns as NRI this year. I had salary income in India in the month of April, May and am employed in US after that.
1. Do I have to fill up schedule FSI in ITR-2?
2. Do I have to show the US salary as salary in schedule salary of ITR2?
Kindly clarify.
Thanks & regards,
Seetha.
Dear Seethalakshmi,
Only Resident Indians have to disclose their foreign income in ITRs.
Thank you.
Hi – Can you please let me know if there has been a change in the number of days used to calculate the NRI status? I heard from someone that post Sept 2015, the rules are changing – i.e. if a person stays in India for more than 50 days, he/she shall be considered as a resident and will lose the NRI status.
Me and my wife live in the U.S. and are on H1B / H4 visas respectively. We plan to visit India this year for 4 months. Would we lose our NRI status if we come for 4 months?
Thanks,
Puneet
Dear Puneet,
As of now, I am not aware of any such thing.
Hi,
Dear Mr. Sreekanth;
Please guide me for below queries:
1.I am staying in UAE; I came here for employment; normally in a year I stay in India for only 45 days during my vacation. Is my status is NRI?
2. I have one NRE account and One NRO account in AXIS bank. I have one own resident saving account (Punjab Nation Bank); other resident joint saving account (Punjab Nation Bank); with my mother and one additional resident saving account (Punjab Nation Bank); with my wife. My wife is staying with me in UAE. Is it required to convert the both resident saving account to NRO or only my own account to NRO or the account with my wife to be converted to NRO or No need to convert to resident saving account to NRO since I have one NRO account already in AXIS Bank?
3. I am planning to purchase one house in India; I have amount in my NRO account, NRE account and also in resident joint account with my mother.
I have done the partial payment up to now from my NRE account, some from NRO account and some from resident joint account with my mother.
Is it correct to do payment from resident joint account also?
4. I want to pay stamp duty and registration fees for my new house; Can I make payment for the stamp duty and registration process from resident joint saving account, or is it required to pay from NRE only or from NRO only.
5. Can stamp duty & registration fees can be paid by DD instead of NEFT from my NRE or is it only from NRO.
My mother is mandate holder for both NRE and NRO account. Can she process for DD on the behalf of me for DD either from NRE or NRO.
Please reply me. Thanks & Best Regards
Dear Anil,
To be frank, I do not answers to some of your queries. It is better if you consult a Chartered Accountant who is an expert on NRI taxation matters.
Regarding residential status – Kindly use the calculator to know if you are an NRI or not.
Since your wife is also staying with you, she may also become an NRI, if so then she needs to update her residential status with her bankers too.
One request, if you get to know the answers for all these questions through some other expert, kindly share them here, my blog readers and myself too can learn 🙂
Hi Sreekanth,
I am resident Indian this year.Uptill now I have been travelling every month on business visa ,so And on the foreign company payroll I am there since April this year it I will get the work permit in SEPTEMBER 2015 so will I be able to achieve the nri status if I stay for more than 182 outside India even if I get the work permit in September 2015.?
Thank you.
Dear Ramesh, the residential status is dependent on the no of days that you stay in abroad. So, kindly use the calculator and check out the applicable Residential Status in your case.
I am having the following queries related to tax implications of NRIs returning back to india permanently. Kindly provide your expert advice in this regards:
1. I came back to india in May-2014 & got 2 months (April & May-14) salary from my saudi company. How about the tax implications of this salary.
2. I am having few FDs in my NRI S/B account. Now i am converting my NRI account in to resident account. Should i need to pay tax for the interest earned from these FDs for the FY-2014-15.
3. My Saudi company had provided me the end of service benefit amount. This amount was credited in my name for the each month of my service starting from 2008. The same was settled at the end of my service in May-2014. Then i have transferred this amount to my indian NRI account. Will this amount is taxable??
Please provide your feedback.
Dear Saravanan,
1 – Did you receive that salary in India or Saudi? Is that salary taxable there?
2 – If those are NRE Deposits, Interest income from NRE accounts is exempt under Income-tax rules.
3 – I believe that as this Income earned outside India and received outside India, it is not taxable in India.
Thanks lot for your reply.
1. I have received that salary from Saudi. It is not taxable in Saudi.
2. All are NRE deposits. I came back from Saudi in May-2014. But some of the FDs maturity date shall be around Decemebr-2015. My doubt is about the period in between May-2014 to March-2015. Since I have become resident during this period , Should I need to pay tax for the interest period. But FD was in NRE status only.
Kindly provide your opinion.
Dear saravanan,
1 – What I mean is, did you receive the salary in India to your indian bank account?
2 – I believe that you should have updated your Residential status with your bankers. Interest income on NRE deposits is exempted from income taxes.
Hi Sreekanth,
I am an NRI. I had some queries.
1. I have Salary Income in India and Long term capital gains but which are exempt (as their holding period is more than 3 years and moreover Equity funds) for the FY 2014-15. As per my understanding from above your explanation I would need to file ITR -2….correct?
2. What is the due date to file ITR for FY 2014-15 as an NRI.
3. Though the LTCG are exempted in my case, I would need to still show the income but in exempted area in the ITR? right?
Thanks in advance.
Dear Ashwin,
1 – ITR2 is applicable.
2 – Last date (as of now) to file ITR for AY 2015-16 is 31st Aug 2015.
3 – Yes, LTCG should be shown as ‘exempted income’ in ITR.
Thank you
Hi Sreekanth,
In previous year i stayed in India for 116 days as per below details. As i was in India for less than 182 days i was checking for condition about employment to know my residential status and ultimately do i need to pay tax for my foreign income. For 250 days i was in Japan for employment but only difference regarding my earnings is, i received Japanese salary for 122 days (4months).
Apr14 – 30
May14-10
Jan 15-17
Feb 15-28
Mar15-31
Thanks!
Sachin
Dear Sachin,
Enter ‘116’ days and then No-No-No for all the following three questions.
Then Fill the no of days for PFY2 to PFY5. Are you in India before Apr 2014?
Hi Sreekanth,
I am bit confused on below statement in your calculator (Did you leave India for permanent employment in abroad (Yes/No)).
In my scenario i left India last year 10 May 14 on business VISA for Japan and my payroll was in India. From Japan itself my employer applied for my work permit. I got work permit on 15 Sep 14 and from that day i shifted to Japan payroll. I was on work permit in Japan till 15 Jan 15 which again i shifted to India payroll. So as per this details am i applicable to answer following query as “YES” i.e. Did you leave India for permanent employment in abroad (Yes/No)
Thanks!
Sachin
Dear Sachin,
I believe that answer is ‘NO’ in your case.
Anyways, your residential status would be ‘RESIDENT INDIAN’ as you have stayed for 165 days in India in the previous financial year.
I’m confused with the NRI status flow chart. It shows if I stayed for more than 60 days in PFY and 365 days in the 4 years preceding PFY, then the status is Residential. I’ve following stay dates..
2014-15 PFY – 27 days
2013-14 PFY – 62 days
2012-13 PFY – 217 days
2011-12 PFY – 340 days
2010-11 PFY – 340 days
2009-10 PFY – 365 days
So what will be my status?
Dear Rakesh,
In the flow chart, kindly understand the point which reads as;
“stayed in India for 60 days or more in Previous years” AND “365 days in the 4 years preceding Previous year”… AND is very important here, so both the conditions need to be met. Hope this clarifies your doubt.
i am out side india for 5 years this FY 2016-17 i will be more than 183 days in india but preceding 4 years i am in india only 150 days so am i NRI or resident of India
Dear monojit..As of now you are an NRI. Kindly use the calculator.
sir i am
PFY 11-12=19 days
FY 12- 13=-only 43days
Fy 13 -14= 34 days
Fy 14-15=36 days
Fy 15-16 37 days for five years
but want to stay in India Fy 16-17 1st April 16 to 10th july16(80 days out side India) and intention to stay more than 183 days (ie from 10 th july16 to march 17) so kindly advice for an individual ,will i be NRI or not (wheather i will be taxable for Fy 16-17
regards
Dear monojit,
In the given scenario, your Residential status would be Resident Indian. Whether taxable or not, it depends on your income slab.
sir, as per IT act ,if anyone stay in india greater than 60 days and less than 365 days in the preceding 4 years he will be NRI in that case what should not I.
otherwise if i stay out of india for FY 16 -17 noly 107 days ( in India 258+37+36+34=365)(FY +3 PFY),will i be NRI. If I stay 183days out side in india so automatically NRI so what is the effect of precedinf 4 years 365 days .
please advice to be NRI another how many days to be out side india
Dear monojit..Suggest you to kindly download the Flowchart available in the above article. I am sure your query gets clarified if you go through it.
in the flow chart it is greater than 60 days and greater than 365 day in India then RESIDENT but If Greater than 60 days and less than 365 days in india so what is the status
Dear monojit..If one stays in India for >= 182 days in a FY then he/she is treated as Resident. There is no need to go through the rest of the flow chart conditions.
Dear Reddy
Thanks for your wonderful article it really enlightened me. I have turned NRI this year.but i have a long lasting question i think you might be the better person to help me with this. I have only a savings account in India where my employer will be transferring my salary in , whether this account is liable to be used as a Tax free account. I am working for 8 yrs and all these years i have paid my taxes. How i can prove myself saying im an NRI apart from my Passport entry exits or is it enough. If the RD (not FD) running on my savings account is still taxable. Please explain to me as im tearing my brains apart
Thanks
A
Dear Arun,
If your income in India is above the basic exemption limit, you need to add any interest income arising out of FDs/ RDs too and file your ITR accordingly. If you have paid your taxes, no need to worry 🙂
Yes, your passport entries are more than enough to establish your ‘Residential Status’.
hi
on 3rd march 2015 i have left India and came to Saudi Arabia for job, i am planning to purchase agriculture land in India in month of august 2015 during my visit to India.
before 3rd march 2015 i never went outside India. am i eligible for the purchase?
Dear Avinash,
Are you a Tax assessee? Generally, an individual who is liable to pay income taxes, is not eligible to buy Agriculture land. Do note that there are lot of
restrictions to buy agriculture land, and these restrictions (or terms & conditions) vary from state to state. So, kindly check out with a lawyer and then go ahead.
(In Karnataka, there are few conditions to buy Agri land like…As per Section 79A of the Karnataka Land Reforms Act 1961, the non-agricultural income of a purchaser who must be an agriculturist should not exceed Rs 2 lakhs per year. Sale of land granted to members of scheduled caste and tribe is not allowed. Also, sale of land granted by the government is not allowed for a period of 15 years)
Hi,
i lived 575 days in last 5 years in india, also in present year i will live the same 115 days approx. what will be my exact status.
i am getting around 160,000 per year interest from fd’s in bank, above mentioned that while exceeding 2 laks, my income on fd’s will be taxable, but on the banks web, it says that money earned by FD’S in Nri/Nre account will be tax free.
do i need to fill some Income tax returns/any thing else with Income tax.
please explain.
Thanks,
N. sharma
Dear Mr Sharma,
Yes, interest earned on NRE FD / Accounts is exempt from tax in india. To calculate your residential status, provide data for the last 5 previous financial years (no of days lived in india in each year).
Dear Mr. Reddy,
Thanks for Replying, Since last 6 years, in each year, I lived only 110 days per year in india, Before that i lived 30 month outside India.
so, what will be my Status exactly, do i need to worry about Income tax related / submitting some thing to Income tax deptt.
do i need to fill some Income tax returns/any thing else with Income tax.
kindly reply,
N. sharma
Dear Sharma,
If you were in India for 110 days for the last 5 ‘Previous Financial Years’, your residential status is ‘Resident Indian’.
Kindly read my article regarding – “Income Tax Rates & Slabs for FY 2014-15“.
If you have income that is more than the basic exemption limit, you need to file your Income Tax Return.
Sreekanth – You have not covered residential status conditions for ROR & RNOR right? I guess you wanted to keep it simple??
Hi Prameela – Yes, I will write another post on that. In this post, i tried to emphasize NRI’s residential status and taxation part.Thank you.
I have stayed abroad for period of about 9 years ( 7 employed+ 2 student) and planning to return to India for good. I would like to know more about how the length of your stay abroad affects your NROR status. It would be really nice of you if you can give some information about that.
Dear Sri,
A person is an RNOR if he meets either of these two conditions: – He/she has been non-resident in India (NRI), in nine out of the ten previous years preceding that year, or – He/she has, during the seven previous years preceding that year, been in India for a period of 729 days or less.
Now depending on the date of return, a person can take the benefit of the RNOR status for up to 3 tax years (Financial Years) in India.
The RNOR is a special status accorded in order to provide some benefits to returning NRIs. For Indian income tax purposes, an RNOR is treated at par with NRIs. That means, an RNOR needs to pay tax in India only on his Indian income. Any income from abroad will not be taxed in India.