I am a US citizen and also an Overseas Citizenship of India (OCI) card holder living in India continuously for the last 12 years (365 days every year). I am planning to relocate to the US on 30 July 2020. Although my stay in India for financial year (FY) 2020-21 would be less than 182 days, it will be 60 days or more in FY21 and also 365 days or more during the preceding four fiscal years. Please advise on my residential status for FY21.
Residential status in India is determined based on total physical presence in India in the current FY and the preceding 10 FYs. If the individual satisfies any of the basic conditions mentioned below, the individual would qualify as a resident; otherwise he or she would qualify as a non-resident.
Basic conditions: (a) physical presence in India during the relevant FY is 182 days or more; or (b) physical presence in India during the relevant FY is 60 days or more and 365 days or more in the preceding four FYs.
The period of 60 days is substituted by 182 days in the following circumstances: (a) For a citizen of India, who leaves India in the relevant FY for the purpose of employment outside India or as a member of the crew of an Indian ship; or (b) for a citizen of India or a person of Indian origin, who being outside India, comes on a visit to India during the relevant FY.
A resident may either qualify as a resident and ordinarily resident (ROR) or resident but not ordinarily resident (RNOR). If both the additional conditions mentioned below are met, then the individual would qualify as ROR; if not, such a person would qualify as RNOR.
Additional conditions: (a) resident in India (as per the basic conditions mentioned above) in any two out of 10 FYs preceding the relevant FY and; (b) physical presence in India is 730 days or more in the seven FYs preceding the relevant FY.
In your case, since you propose to relocate to the US on 30 July 2020, you will qualify as ROR in India for FY21 since all the below conditions are satisfied: (a) Your physical presence in India is 60 days or more during the FY21; (b) your physical presence in India is 365 days or more during the period 1 April 2016 to 31 March 2020; (c) your physical presence in India is 730 days or more during the period 1 April 2013 to 31 March 2020; (d) you qualify as resident of India in any two out of the 10 preceding FYs.
As you are not a “citizen" of India, the exception to substitute 60 days with 182 days will not apply in your case as you are neither an Indian citizen nor as a person of India origin coming to India on a visit.
If you wish to become a non-resident in FY21, it would be advisable for you to spend less than 60 days in India during FY21 and plan your relocation date to the US accordingly.
Sonu Iyer is tax partner and people advisory services leader, EY India. Queries and views at email@example.com