Residential Status – NRI or Resident? & NRI Taxation

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• Hello,
  During Financial Year 2019-20, I was not in india for 285 days, and while working along with studies, I have earned approx 8.8 lacs INR doing part time job for livelihood as permitted under my visa. Whether such income is treated as scholarship and exempt from tax or will be treated as salary? But since I was away for the purpose of studies-employment and not in India for more than 180 days, it will be not be taxed in India. Kindly confirm with relevant tax clauses and judgement references.
  Year Days in India Days Abroad(for education-work)
  2015-16 128 237
  2016-17 309 56
  2017-18 365 0
  2018-19 175 190
  2019-20 80 285

  • Dear Samir,
    I believe that such income is not treated as scholarship.
    Suggest you to kindly consult a CA in this regard.

    Related article : What is Double Taxation Avoidance Agreement (DTAA)? | Is Income earned outside India Taxable?

• Hi,
  I am US citizen residing in India. For FY 2020-21(AY 2021-22), I will be filing my taxes as RESIDENT ORDINARY RESIDENT(ROR). As a result my USA income will be taxable.

  In April, 2020 and Jan 2021, I received monetary RELIEF payment by US government as a RELIEF measure to all US citizens due to Corona virus pandemic. These payments came as income tax refund thru IRS (Internal Revenue Service) which is equivalent of CBDT in India. These payments will not be considered as income of taxpayer in USA by IRS.

  My question is how this payment will be treated by CBDT?? If CBDT considers this as income then I will show this as income while filing my return for AY 2021-22. But if CBDT would NOT consider it as income like US govt., then I will not add this with my income for AY 2021-22.

  Please help.

  P. Sharma

  • Dear Mr Sharma,
    Request you to kindly consult a CA in this regard.
    In my opinion, this income may not be taxable in India as well.

    Related article : What is Double Taxation Avoidance Agreement (DTAA)? | Is Income earned outside India Taxable?

• I returned from my overseas assignment of more than 10 years on 7th Feb 2019. I have visited India during this period every year for vacation. I am furnishing the summary of the no of days visited each FY.
  2019 -20 - 337 days ( I have returned for good)
  2018-19 - 115 days
  2017- 18 - 22 days
  2016- 17 - 30 days
  2015 -16- 44 days
  2014 - 15 - 37 days
  2013 -14 - 29 days
  2012 - 13 - 13 days
  2011 -12 - 29 days
  2010 - 11 -34 days
  2009 -10 - 4 days.
  For the FY 2018-19, I am treated as NRI. For the FY 2019-20 I have declared myself as RNOR based on the fact that the no of days of stay in the previous 4 years is less than 365 days. I would like to know whether I will be eligible to claim the RNOR status for the FY 2020-21 and FY2021-22 also. Please help me to understand either way.

• Please see if you can help.

  I am US citizen and also an OCI card holder living in India continuously for last 12 years (365 days every year). Now I am planning to relocate to USA on July 30, 2020. Although my stay in India for FY 2020-21 would be less than 182 days but will be 60 days or more in FY 2020-21 and also 365 days or more during the preceding 4 fiscal years.

  Please advice on my residential status for FY 2020-21(AY 2021-22)???

  This query arose because of fact that if verbiage of more than 60 days stay in India is substituted with 182 days for PIO or OCI holders. Also if this would apply in my case as I will not be VISITING but leaving India after staying for more than 60 days in FY 2020-21.

  (being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted.

  Regards.

  Pancham Sharma

  • Dear Pancham,
    Even though if you do not stay for 182 days in FY 2020-21 in India, but if you stay in for min 60 days AND had stayed for at least 365 days in the last 4 FYs then your residential status can still be considered as Resident Indian for the said FY.

    You may kindly consult a CA as well!

    • Thanks Sreekanth for prompt response.

      There was a reason for this query. I agree with your opinion that although I stayed for less than 182 days but stayed for more than 365 days in last 4 years I should be treated as RESIDENT.

      But when I input the same information in the residency calculator as PIO/OCI, it categorized me as NON RESIDENT.

      Does being PIO/OCI changes my category from Resident to Non Resident???

      Regards.

      Pancham

      • I used the Residency calculator on your website.

        Pancham

        • Dear Pancham,
          I am not very sure on this..You may kindly re-check with a CA.

          Plz go through this link, can be useful

        • Thanks Sreekanth for honest and sincere advice.

          Regards.

          Pancham

• I have moved to USA from India on October 30th 2018, i havent visited India since October 2018 till today (16-August-2019).

  I need to sell my property in India, Home registration will be around Nov 2019 and agreement will be around Sep-Oct 2019 , should buyer deduct TDS at 20% or 1 %?

  If i have to pay 20% TDS , can i claim it back by investing in infrastructure bonds ?

  Is TDS calculated on the whole of the sale amount or just on the profit earned ?

  Will I be considered as NRI based on current finanical year 2018-2019 or prevoius finanical year 2017-2018 ?

  Really appreciate your help, Thanks in advance.

  • Dear Pramod,
    As you are expecting to sell the property during Nov 2019, the applicable FY is 2019-20.

    As per the Indian Income Tax Act, when a resident purchases any property from a non resident, he has to deduct income tax (TDS) and pay the balance amount to the seller. He has to deduct 20% of the sale consideration as tax before making the net payment to seller.

    You can save on Long Term Capital Gains (if any) through various options.

    Kindly read :
    * How to save Capital Gains Tax on Sale of Land / House Property?
    * How NRIs can save on Tax in India? | NRI Tax Saving options
    * How to save Tax on Rental Income in India?

• Hello sir, I had been in abroad for the period
  1. Jan 1995-May 2003
  2. Jan 2011-Aug 2013
  I had an NRE sb account and 2 NRE FDs in 2014 of 3 and 5 lakhs each. The same was deposited for 1 year each and it was continuously renewed along with interest accrued every year. Recently I broke on FD and since it was broken with in 6 months bank did not give any interest. I have been un employed since 2013 Aug except for a period of 8 months and a sum of Rs.240,000 salary earned. Whether the interest on FDs which are re deposited in accumulation for the last 5 years are taxable? Even if , since no salary income is it required to file ITR?.
  regards
  K John

  • Dear KURIAKOSE,
    For individuals of age less than 60 years, the basic exemption limit it Rs 2.5 lakh. In case, your interest income is more than that, you have to file ITR. Also, check if your bankers have deducted TDS through Form 26AS.
    Suggest you to consult a CA.

    Kindly read :
    * Do I need to file my Income Tax Return?
    * AY 2019-20 Income Tax Return Filing | Which ITR Form should you file?
    * Understanding your Form 16 & other Tax related forms (Form 16A & Form 26AS)

    • Sir,
      Bank has not yet deducted any TDS. However, the income for the Fy is only 65,000 towards FD interest I haven't filed any ITR. Is it right?

      • Dear Mr KURIAKOSE,
        If interest income is the only source of income then there is no need to file ITR in your case.
        But, its always beneficial to file ITR.

• Hi Sreekanth
  I have a small query. I was in Oman for 16 years and all 16 years I was an NRI as per definition. I returned back for good in 2019. Firstly because of my NRI status for 9 years out of 10 years on continuous basis, can I claim the status of RNOR status for the next 3 financial years. Further one FD which I had put under NRI status when I was abroad will mature in 2020. Can I renew the FD again under NRI status as I am having RNOR status for 3 further years after return from abroad. Kindly advise me sir. Your valuable advise will help me immensely. Thanks Sir.

  • Dear Krishna,

    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.

    So, you can claim to be an RNOR. So, you are allowed to keep your RNOR status for up to 3 financial years post your return back to India.

    I think, under RNOR status, you continue to get the taxation benefits similar to an NRI, but, I believe that you can not renew the maturing deposits under same terms.

    You may go through below articles :
    * NRI Status and NRI Taxation
    * All you want to know about RNOR status..

• 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?