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I am working in the UAE. Due to my busy schedule, I sometimes ask my employees or friends to remit my money to my Non-resident Ordinary (NRO) account in India. However, When they do so, their names appear in my account. Is this money (transferred by my friends or colleagues on my behalf) taxable in India? 

— Name withheld on request

 

Whether or not your income will be taxable in India, will depend upon your residential status in India, the source of such income and also its place of receipt. Firstly, you should determine your residential status for the relevant financial year. 

You shall have to determine your residential status in the following manner.  Conditions: a) you are in India for 182 days or more in the 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. 

In the above condition the period of 60 days is substituted by 182 days for a citizen of India or a person of Indian origin, who lives outside India and comes to visit India in the said financial year. The same applies for a citizen of India who leaves India in the said financial year for the purpose of employment outside India or as a member of a crew of an Indian ship. 

Assuming that you are a non-resident in India for tax purposes based on the above, the income received by you in India from your employer shall not be taxable in India merely on the basis of its receipt in India. If this is an income which is paid to you for the services rendered by you outside India, it shall not be taxed in India merely because it has been received in India. 

Money received by you from your friends may be considered as gifts and may be taxed in your hands in India (since received in India), based on the nature and the purpose of the receipt. 

Archit Gupta is founder and CEO, at Clear.in.

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