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Home >Money >Q&a >Taxability in India depends upon your residential status for the relevant FY

I am moving to Canada for work and I intend to settle there. I lived in Canada for nearly 200 days in 2018. Do I qualify as a non-resident Indian (NRI)? I worked in an Indian company for about five years till January 2018 and I want to withdraw my EPF. Would it be taxable in my hands?

—Suman Sharma

Whether you will have to pay taxes in India depends upon your residential status in India for the financial year in question.

You can test your residential status in the following manner. You must meet any of the following conditions and both the additional conditions:

Conditions: a) you are in India for 182 days or more in the financial year (FY); or b) you are in India for 60 days or more in the FY and 365 days or more in the four FYs immediately preceding the relevant FY.

Additional conditions: you are resident in India in two of the 10 FYs immediately preceding the relevant FY; and you are in India in the seven years immediately preceding the relevant FY for 729 days or more.

If you meet any of the first set of conditions and both the additional conditions, you shall be considered a resident in India. If you meet any of the first conditions but do not meet the additional conditions, you shall be considered a resident but not ordinarily resident (RNOR) in India. If you do not meet any of the first conditions, you shall be a non-resident in India.

While it seems that you do not meet condition a) of the first set of conditions, you may still meet condition b) and both the additional conditions; therefore, in such a case, you may still be a resident in India for tax purposes for the financial year in question. Kindly note, status must be checked for financial year and not calendar year.

Withdrawal from EPF after completion of five years of continuous service is not taxable in India.

Archit Gupta is founder and chief executive officer, ClearTax. Queries at mintmoney@livemint.com

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