Inward remittance to India

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An individual who was a Resident Non-Ordinary Resident (RNOR) for two financial years and is now a Resident Ordinary Resident (ROR) is seeking clarity on the tax implications of remitting retirement benefits and salary arrears from their Saudi Arabian bank account to India. The funds were earned tax-free in Saudi Arabia. The advice provided is that transferring these existing funds to an Indian bank account will not be taxed again, as taxation is based on income earned or accrued in a financial year, and the transfer itself does not constitute new income.

ANIL KUMAR TEWARI

ANIL KUMAR TEWARI (Querist)
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29 June 2023 Sir, I was having RNOR status of 2 Finacial years which expired on 31st March 2023 thus changing my status to ROR for current FY 2023-24. My query is that my Saudi Arabia bank account holds balance money as a result of payment of retirement benefit ( gratuity) + Salary arrears paid after I returned to India permanently in January 2021 after 15 yrs as NRI continuously then. What is the tax implication of bringing this money to India now ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 June 2023 The balance lying in the account as of 31.03.2023, will not be taxed again. Any interest earned on it and any additional income earned in foreign country needs to be declared in next AY, along with Indian Income.

ANIL KUMAR TEWARI

ANIL KUMAR TEWARI (Querist)
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30 June 2023 the above salary payment in Saudi Arabia was Tax Free and no interest earned due to islamic provisions applied there. how does the question of taxed again arise when tax was never paid ? Now, when this money will arrive in India during current FY 2023-24, it will be in the account of ROR and not RNOR. Does this make different tax implications ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 June 2023 Taxation is based on any income earned or accrued in relevant financial year. You would have declared the balance of the account in schedule FA while filing current ITR as RNOR. When you transfer the same amount to your sav account in India, it will not said to be income earned in the process of just amount transfer from your foreign bank account to your own Indian bank account. Hence it will not be taxed.

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