Residential Status – NRI or Resident? & NRI Taxation

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• 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?

  • 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 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.

• 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)