Navigating the intricacies of Indian taxation as a Non-Resident Indian (NRI) can be daunting. Understanding your residential status and the tax implications is essential for compliance and effective financial planning.
In this essential guide to NRI taxation, we delve into the nuances of Indian tax laws, shedding light on key concepts, regulations, and strategies
Income Tax for NRI: Understanding Residential Status and Tax Implications
Taxes play a pivotal role in fueling the Indian economy, and Non-Resident Indians (NRIs) fall under a unique tax regime governed by the Indian Income Tax Act, 1961. Here’s a comprehensive overview:
Determining Residential Status:
- An individual is considered a resident in India if they spend 182 days or more in the country during the financial year.
- Alternatively, if they spend 60 days or more in India during the previous year and 365 days or more in the last four years, they are also considered residents.
- Non-Resident Indians (NRIs) are those who do not meet any of the above conditions.
Resident but Not-Ordinary Resident (RNOR) Status:
- RNOR status is applicable if an individual has been a non-resident in India for 9 out of the preceding 10 years or has spent 729 days or less in India during the 7 years preceding the previous year.
Amendments in Residential Definitions:
- Finance Act 2020 introduced amendments, classifying certain individuals as RNOR based on conditions like income and duration of stay in India.
- The concept of ‘Deemed residency’ was introduced for Indian citizens earning more than Rs 15 lakh from Indian sources.
Special Relief Due to COVID Lockdown: https://www.instagram.com/fintaxbytes/
- Individuals stranded in India due to COVID-19 lockdown or quarantine measures may receive special relief for the period of stay during specific circumstances.
