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NRI Taxation?
Written by Gagandeep Arora - Printed on - Date - 1th July 2022
Non-resident Indians are residents who are earning income outside India. The rules and regulations are different for an NRI and an Indian citizen. To be an NRI we need to determine your residential status.
NRI Status
If an assessee satisfies the following conditions then he will be considered an Indian resident for the financial year-
- When you are in India for at least six months (182 days) during the financial year.
- You are in India for the last two months(60 days) of the previous year and have lived for one whole year(365) in the last four years.
If you are an Indian citizen working abroad or a crew member on an Indian ship then to be a resident you should have spent only 182 days in India during a financial year. This condition applies to a person of Indian origin
who visits India. A person is considered to be of Indian origin whose parents or grandparents were born in undivided India.
If an assessee does not meet any of the above conditions then you are a Non-resident Indian.
Resident but not ordinary resident
An assessee is considered a resident but not an ordinary resident for the financial year if they meet the following conditions-
- If you have been a non-resident Indian for nine years out of the ten previous years.
- If you have stayed in India for 729 days or less during seven previous years.
According to the finance act 2020, a few amendments have been made to the provisions to include Indian citizens who come to visit India
- According to the finance act 2020, a few amendments have been made to the provisions to include Indian citizens who come to visit India
- The assessee has stayed for a period exceeding 120 days but less than 182 days
- The individual has stayed in India for more than 365 days or more in four years preceding the previous year.
Taxability Of Your Income Earned Abroad
The income earned abroad is not taxable in India but income earned as capital gains from shares. Mutual funds, term deposits, and property rentals if it exceeds the exemption limit. But any salary income earned in India or any salary earned for any service provided in India will fall in the category of taxable income for an NRI.
Conclusion- Taxes An Important Element
Taxes help to build a better infrastructure in our country therefore any taxable income earned in India that falls under the bracket of taxability is assessed and being a good citizen should be paid. But firstly, you should check whether your income is taxable in India as there is a double taxation avoidance agreement signed by India with different countries from which an NRI can take a benefit but you need to have proper proof for that and proper guidance of a professional.
