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What is the tax obligation of NRIs on a visit?

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  • For a citizen of India or a person of Indian origin, who is visiting India, the 60 days are considered changed in the following manner. 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

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I am an Australian citizen for over 25 years and hold an Overseas Citizenship of India card too. I am considered an Australian resident for income tax purposes. However, I visit India regularly. When I retire, I want to spend more time in India with my charity work. Will I become an Indian resident for tax purposes if I continue to visit India for 3 to 4 months, or more a year ? 

—Name withheld on request

 

You shall have to determine 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 FY; or b) 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 visits India in the said FY. The same applies for a citizen of India who leaves India in the said FY for  employment purposes or as a member of a crew of an Indian ship. 

There is also another rule of deemed residency. An individual who is a citizen of India who is not liable to tax in any other country or territory and 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 of India or a person of Indian origin, who is visiting India, the 60 days are considered changed in the following manner. 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 stipulate that you are a resident in India in two of the 10 FYs preceding the relevant FY; and you were 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 ones, you shall be considered a resident in India. If you meet any of the first conditions but not the additional ones, you shall be considered a resident but not ordinarily resident in India. If you do not meet any of the first conditions, you shall be a non-resident in India. 

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

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