How are NRIs taxed on foreign income in Indian accounts? | Mint
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Business News/ Money / Personal Finance/  How are NRIs taxed on foreign income in Indian accounts?
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How are NRIs taxed on foreign income in Indian accounts?

An individual who is a citizen of India and not liable to tax in any other country or territory has total income, other than from foreign sources, exceeding ₹15 lakh during the said FY, shall be a deemed resident of India.

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Photo: iStock

I worked in Australia on a temporary assignment for 7 months. I earned in Australian dollars during that time and the income was credited to my bank account in India. How should I file my income tax return since I am back in India?

—Name withheld on request

To find out how your income will be taxed, it is important to first establish your residential status as per the Income Tax Act for each fiscal year. For FY23, this can be done if you meet any of the following conditions and both the additional conditions:

a) You are in India for 182 days or more in the FY; and 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 (PIO), who lives outside India and comes to visit India in the said fiscal year. The same applies for a citizen who leaves India in the said fiscal year for the purpose of employment outside India or as a member of a crew of an Indian ship.

An individual who is a citizen of India and not liable to tax in any other country or territory has total income, other than from foreign sources, exceeding 15 lakh during the said FY, shall be a deemed resident of India.

For a citizen or a PIO who comes on a visit to India, if total income, other than income from foreign sources, exceeds 15 lakh the 60 days are substituted by 120 days; in any other case, the 60 days are substituted by 182 days. Such persons are considered as deemed residents.

Additional conditions: you are a 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.

Archit Gupta is founder and chief executive officer, Clear.in.

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Published: 10 Apr 2023, 11:26 PM IST
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