New criteria for NRI status and how income will be taxed in India effective from FY2020-21

Is my income earned abroad is taxable ?

Yes ! If your status is ‘resident’ as per income tax law , your global income ( Indian as well as foreign income) is taxable in India. In case your status is ‘NRI,’ your foreign income which is earned outside India is not taxable in India.


Is my income earned in India is taxable ?

Tax free Indian incomes for NRIs : Interest earned from an NRE bank account and FCNR bank account , PPF is tax-free.

Taxable Indian incomes for NRIs : All other incomes including Interest on NRO account ,salary received in India or salary for service provided in India, income from a house property situated in India, capital gains on transfer of asset situated in India, income from fixed deposits or interest on savings bank account are all examples of income earned or accrued in India. These incomes are taxable for an NRI.


How do I determine my residential status ?

You are considered an Indian resident for a financial year (1st April to 31st March) :

  • When you are in India for at least 6 months (182 days to be exact) during the financial year and your indian taxable income is less than Rs. 15.00 lacs

  • When you are in India for at least 4 months (120 days to be exact) during the financial year and your indian taxable income is more than Rs. 15.00 lacs

  • You are in India for 2 months (60 days) for the year in the previous year and have lived for one whole year (365 days) in the last four years

If you are an Indian citizen working abroad or a member of a crew on an Indian ship, only the first condition is available to you – which means you are a resident when you spend at least 182 days in India. The same is applicable to a Person of Indian Origin (PIO) who is on a visit to India. The second condition is not applicable to Indian citizen working abroad , member of a crew on an Indian ship and Persons of Indian origins (PIO) . A PIO (Person of Indian origin) is a person whose parents, or any of his grandparents were born in undivided India.

You are an NRI if you do not meet any of the above conditions.


Special relief due to COVID lock-down

For FY 2019-20 if an individual has come to India on a visit before 22nd March, 2020 and

  • Has been unable to leave because of lock-down on or before 31st March, 2020, period of stay from 22nd to 31st March shall not be considered.

  • Has been quarantined due to Covid19 on or after 1st March, 2020 and departed on evacuation flight on or before 31st March, 2020, or unable to leave India his period of stay from the beginning of quarantine to 31st march shall not be considered.

  • Has been departed on a evacuation flight on or before 31st March, 2020, period of stay from 22nd March 2020 to date of departure shall not be considered

Am I Required to File My Income Tax Return in India?

Any individual whose income exceeds Rs.2,50,000 as per table above is required to file an income tax return in India.

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