NRI or RNOR (Deemed Resident)?

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This discussion clarifies an individual's tax residency status in India for FY 23-24. Despite entering the UAE on a tourist visa and later converting it to a virtual work visa, the individual is considered to have left India for employment purposes. This means they will likely be classified as an NRI (Non-Resident Indian) and their foreign income will not be taxed in India, even if their Indian income exceeds ₹15 lakh, as they are a tax resident of the UAE where their income is exempt.

Mitesh Jain

Mitesh Jain (Querist)
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06 April 2023 Hi,

Can you please help me with my residential status and tax liability for FY 23-24?

I left India on 26th Sept'22 on Tourist Visa for self-employment purposes and got visa converted Inside country (UAE) to Virtual Work Visa. Approved on 5th Oct'22.

Will there be any Issues because I came on Tourist Visa and then converted my Visa to Virtual work visa? I had to come on Tourist visa because there were visa processing Issues from India.
Total 190 days in UAE, 15 days on tourist VISA and remaining 175 days on Virtual Work Visa.
I was in India for 172 days.

Will I be NRI? 0% tax IN UAE and Indian Income is >=15L or will I be RNOR Deemed Resident? If RNOR, will my foreign Income be taxed because my profession is same but no longer continued from India.

Thank you.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2023 You will be considered as gone outside India for employment.
You will not be considered as deemed resident. Your foreign income will not be taxed in India.

Mitesh Jain

Mitesh Jain (Querist)
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07 April 2023 Thank you sir. Will It be an Issue I left on Tourist visa and then converted VISA Inside country? I am asking because first 15 days were on Tourist visa and rest 175 days on proper visa. Proper work visa approved on 3rd October

Thanks,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2023 No issue you have gone with the intention of getting a job.

Mitesh Jain

Mitesh Jain (Querist)
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07 April 2023 Thank you for your reply sir.
2 more questions if you don't mind please.

I have gone to continue my existing work as I am self employed. Will this be covered?

As per new section From the financial year 2020-21, Indians who have total income (from other than foreign sources) of over Rs 15 lakh during a financial year are considered to be of deemed residential status in that year if they are not a tax resident of any other country. Those considered deemed resident will be considered as RNOR.

Will I be RNOR because I am not liable to tax in UAE. If RNOR, is foreign income going to be taxable? Business or profession is not controlled from India.

Thanks again for your patience!

Thanks,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2023 Self employed is also for employment.
You are tax resident of UAE where the income is exempt.

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