Q.1012: Out of India for more than 182 days in a financial year makes a
person NRI for tax purposes
Question: If in the financial year 2017-2018, I stay out of India for more than 190 days Should I be treated as a NRI for this financial year for Income Tax purposes? I am not taking any full time job in overseas. I propose to go overseas on a Retirement visa. Also please note that in last 5 yrs I have never gone overseas. Rgds Kunal Mitra Answer: Residential status for taxation purposes in India is determined under the rules set out in Section 6 of the Income Tax Act, 1961-2016. The rules specify that a person would be resident in India if any one [or both] conditions stated below are satisfied: 1. In India for a period of 182 days or more in that year; or 2. In India for a period of 60 days or more in the year and for a period of 365 days or more in 4 years immediately preceding the relevant year. If an individual does not satisfy any of the above conditions he/she will be treated as non-resident in India for taxation purposes. What is important here is to note that the absence from India is based on financial year. Do not count absence from India based on a year being January to December. In India a Financial Year runs from April 1 to March 31. Keep in mind that for the financial year 2017-2018 the assessment year would be 2018-2019. Note: The definition of NRI is different under Foreign Exchange Management Act [FEMA]. Under FEMA the definition of a resident is on the basis of the 'purpose of stay abroad' where as under the IT Act, residential status is on the basis of one's 'actual period of stay' in India.
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Q.1012: Out of India for more
than 182 days in a financial year
makes a person NRI for tax
purposes
Question: If in the financial year 2017-2018, I stay out of India for more than 190 days Should I be treated as a NRI for this financial year for Income Tax purposes? I am not taking any full time job in overseas. I propose to go overseas on a Retirement visa. Also please note that in last 5 yrs I have never gone overseas. Rgds Kunal Mitra Answer: Residential status for taxation purposes in India is determined under the rules set out in Section 6 of the Income Tax Act, 1961-2016. The rules specify that a person would be resident in India if any one [or both] conditions stated below are satisfied: 1. In India for a period of 182 days or more in that year; or 2. In India for a period of 60 days or more in the year and for a period of 365 days or more in 4 years immediately preceding the relevant year. If an individual does not satisfy any of the above conditions he/she will be treated as non-resident in India for taxation purposes. What is important here is to note that the absence from India is based on financial year. Do not count absence from India based on a year being January to December. In India a Financial Year runs from April 1 to March 31. Keep in mind that for the financial year 2017-2018 the assessment year would be 2018-2019. Note: The definition of NRI is different under Foreign Exchange Management Act [FEMA]. Under FEMA the definition of a resident is on the basis of the 'purpose of stay abroad' where as under the IT Act, residential status is on the basis of one's 'actual period of stay' in India.
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