Residential Status – NRI or Resident? & NRI Taxation

View Comments

• 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.