Australian Citizens living in

India

Australians can be taxed on their worldwide income, unless they become non-residents for tax purposes. Those who are considered as non-residents for tax purposes in Australia are taxed only on income that is derived from Australian sources. Normally if you leave Australia permanently, for tax purposes you are treated as a non-resident from the date of your departure. Persons of Indian origin from Australia, who plan on settling in India, can take advantage their non-resident status to avoid additional tax liabilities in Australia. Once they are non-residents, there is no requirement to declare their Indian income in Australia. Australian citizens who are considered non-residents for taxation purposes, are required to pay taxes in Australia on all income derived from Australian sources, e.g. bank interest, dividends, rental income, etc. Australian OCI holders have an advantage over U.S. OCI holders because: 1. 1. U.S. OCI holders are required to file taxes in U.S.A and declare the any income they earn in India or anywhere else in the world. 2. Australian OCI holders are not required to file taxes in Australia to declare their income in India or anywhere else in the world. 3. At some point of time, Australian citizens residing in India will also lose their 'Not Ordinarily Resident' (NOR) tax category status. Their worldwide income would then become taxable in India. However, as India and Australia, have a tax treaty between them, Australians living in India will get relief from dual taxation. When filing their tax return in India, they will receive a credit for any taxes they've already paid in Australia.

Points to Remember:

1. If you are an Australian citizen, resident in Australia, your worldwide income is taxable in Australia. 2. If you leave Australia temporarily and do not set up a permanent home in another country, you remain an Australian resident for tax purposes and your global income is taxable. 3. If you leave Australia permanently, you are not treated as an Australian resident for tax purposes from the date of your departure. 4. An Australian citizen with OCI, if they move to India and become non-residents in Australia, Then any income they earn in India is exempt from taxes in Australia. The only taxes they would have to pay when they are non-resident are income that is derived from within Australia. 5. OCI holders should keep in mind that even though they might be treated as non-residents from the day they left Australia permanently with the intention of living in India, in case the spend more than 183 days in Australia, either continuously or intermittently, they may become a resident of Australia for tax purposes.