BackHow is I-T calculated if NRI status is for 1 year?
Pension received from India shall be taxable in India
PremiumI have been staying in Singapore with my daughter since September 2020. For matters of income tax, I will be considered a non-resident Indian (NRI) for FY 2021-22. My sources of income include pension, house rent and shares, besides interest from fixed and recurring deposits in India. I don’t have any foreign income or assets. What are the tax implications for the said period?
I intend to return to India in June 2022 and will be resident in FY 22-23 and thereafter. I have been contributing to public provident fund to lessen my tax burden. Under these circumstances, should I exercise the new tax option in AY 22-23 ?
V. Narayanan
Since you have not spent a single day in India during FY 2021-22, you are likely to be non-resident in India for that period.
Pension received from India shall be taxable in India. Standard deduction shall be allowed to be claimed by you. Standard deduction of 30% from rental income is also allowed to be claimed by NRIs. You can also claim ₹1 lakh as exemption from sale of equity shares. Please note that you are allowed to make a deposit to your existing PPF and claim a deduction under section 80C for it.
Deduction under section 80TTB is only available to those senior citizens who are resident in India. Senior citizens who are non-resident in India cannot claim deduction under section 80D.
You shall also be allowed to claim deduction for any money deposited to PM Cares fund under section 80G. However, basic exemption limit for you shall be ₹2,50,000. Section 87A is also only available to resident taxpayers.
2. Both non-resident and resident taxpayers are allowed to opt for the new tax regime under section 115BAC at the time of filing their tax return.
A taxpayer can switch to a more favorable regime, i.e. the regime where she pays lower taxes. A non-salaried taxpayer (taxpayers with an income from business or profession) cannot opt-in and opt-out of the new tax regime every year. Once a non-salaried individual opts out of the new tax regime, they cannot opt-in again for the new tax regime in the future.
Archit Gupta is founder and chief executive officer, Clear.in.
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