Residentails status

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 March 2014 Hi,

i was transfer in UK unit of my company from 1st jan 2012 and left India on 28th Nov 2012.

any one can suggest me my residential status for filing of IT return for the Fy. 12-13.

also i have paid tax on UK ,can i avail credit /Refund in UK salary income Tax .

which manner I compute my tax. which exchange rate i use for taking income in my IT return .i receive in salary in UK currency.

Querist : Anonymous

Querist : Anonymous (Querist)

31 March 2014 Please help to explain me second Basis condition of Sec 6 of income tax .

As per Exception 60 days extended to 182 days, it is only for the year of left India for employment ? or It is applicable for next year also .

in my case i am in india less than 182 days in previous year .

i left India on 1st Nov 2011 and return back after completing my assignment 18th Nov 2012.

in A.Y.2013-14 my residential status is NRI / resident Indian ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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22 July 2025 1. Residential Status for FY 2012-13 (For your transfer to the UK)
You mentioned that you were transferred to the UK unit of your company starting 1st January 2012 and left India on 28th November 2012. Here's how your residential status for FY 2012-13 would likely be determined:

Section 6 of the Income Tax Act (Residential Status):
To determine your residential status, the number of days you stay in India during the financial year is the key factor.

Basic Conditions for Being a Resident:
Condition 1: You should have stayed in India for 182 days or more during the financial year.

Condition 2: Alternatively, you must have stayed for 60 days or more in the financial year and 365 days or more during the preceding four years.

Your Stay in India:
You stayed in India from 1st April 2012 to 28th November 2012, which is approximately 8 months.

In terms of days, your total stay in India was less than 182 days for FY 2012-13.

Since you left India on 28th November 2012, your stay in India was less than 182 days, so you do not meet the first condition of staying 182 days in India.

Conclusion for FY 2012-13:
Since you stayed in India for less than 182 days, and you do not meet the second condition either (because you stayed less than 60 days in India after leaving the country), your residential status for FY 2012-13 would likely be Non-Resident (NRI).

2. Tax on UK Salary Income and Foreign Tax Credit
Since you worked in the UK during the period and paid taxes in the UK on your salary income, you can claim foreign tax credit in India for the taxes paid in the UK.

Here’s the process:

UK Salary: Since you are an NRI in India for FY 2012-13, your salary earned in the UK will generally not be taxable in India unless it is remitted to India or arises from Indian sources. This is based on the residency status.

Foreign Tax Credit: To avoid double taxation, India provides relief for taxes paid abroad. You can claim a credit for the taxes paid in the UK under Section 90 of the Income Tax Act, which deals with the Double Taxation Avoidance Agreement (DTAA) between India and the UK.

Important Points:
You will need to provide proof of taxes paid in the UK to claim the credit.

The credit is limited to the lower of:

The taxes paid in the UK, and

The Indian tax liability on the foreign income.

3. Exchange Rate for Income in UK Currency
You receive your salary in GBP (British Pound), and when reporting the income in your Indian tax return, you need to convert it to INR (Indian Rupees).

Exchange Rate: You should use the average exchange rate for the financial year to convert your income. The average exchange rate is usually published by the Reserve Bank of India (RBI) or can be found in the Income Tax department's guidelines.

Alternatively, if you do not have the exact average exchange rate, you can use the rate on the date of receipt of the salary.

For FY 2012-13, the applicable exchange rates should be referenced from RBI or the income tax circulars for that year.

4. Exception to the 60-Day Rule (Section 6)
As per Section 6, there is an exception to the 60-day rule for individuals who are leaving India for employment outside India.

Key Points about the 60-day Exception:
If you leave India for employment outside the country, the period of 60 days is extended to 182 days.

This exception only applies in the year of departure from India, so it does not apply in the subsequent years.

For example:

In your case (FY 2011-12), you left India in November 2011 for your employment in the UK.

The period of 60 days is extended to 182 days for this year, meaning you would still be considered a Resident in India for FY 2011-12 if you stayed 182 days or more.

However, in FY 2012-13, you would not qualify for this exception anymore, as it only applies in the first year of departure. For FY 2012-13, you are a Non-Resident (NRI) based on your stay in India.

Summary:
For FY 2012-13, since you stayed in India for less than 182 days, your residential status is Non-Resident (NRI).

You can claim foreign tax credit for taxes paid in the UK under the DTAA.

Use the average exchange rate for the financial year to convert your salary from GBP to INR when filing your tax return in India.

The 182-day exception rule only applies in the year of leaving India for employment. In your case, you qualify for the exception in FY 2011-12, but not in FY 2012-13.

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