Residential Status

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Vinay kothari (Querist)
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18 October 2016 Suppose an individual is R-NOR during relevant P.Y. 15-16. He is a person of indian origin. He completed his MBBS form AIIMS in 1973 and migrted to USA . He earns 2 Lakhs in USA during PY 15-16. He comes to india in PY 15-16 and performs a surgery here as well. Whether his income in USA will be taxed under the pretext " INCOME ACCRUING /ARISING ABROAD AND RECD. ABROAD BUT FROM PROFESSION SET UP IN INDIA " ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 October 2016 In case of Resident but not ordinarily resident income earned outside India is not taxable in India.

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Vinay kothari

Vinay kothari (Querist)
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18 October 2016 In case of R-NOR , INCOME EARNED OUTSIDE INDIA IS TAXABLE IF BUSINESS IS CONTROLLED FROM INDIA OR PROFESSION IS SET UP IN INDIA ( Sec. 5 )

Aashok Kumar Sharma online

Aashok Kumar Sharma online

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21 July 2025 Great question! Here's a detailed explanation regarding the residential status Resident but Not Ordinarily Resident (R-NOR) and taxation of foreign income from profession/business:

Facts Recap:
Individual is R-NOR in PY 2015-16.

Indian origin, migrated to USA, earned Rs. 2 Lakhs in USA during PY 15-16.

Also performed surgery in India during PY 15-16.

Taxability of Foreign Income for R-NOR (Section 5 of IT Act):
Section 5(1) says:

Resident individuals are taxed on their global income.

But in case of R-NOR, only income which is:

Received or accrued/arisen in India, OR

Income earned from a business controlled in India or profession set up in India,

is taxable in India.

Foreign Income Taxability for R-NOR:

If the foreign income arises from a profession or business controlled or set up in India, then that foreign income is taxable in India.

If foreign income arises from a profession/business outside India, and it is not controlled or set up in India, then that foreign income is not taxable in India.

Application to your scenario:
The Rs. 2 Lakhs earned in the USA — is it from a profession set up or controlled in India?
Likely No — since it's income earned from working in USA, unrelated to Indian professional setup.

The income from surgery performed in India is taxable in India, obviously.

Therefore:

Income earned in USA (Rs. 2 Lakhs) will not be taxable in India for R-NOR, as the profession setup/control is in USA.

Income earned in India (from surgery) is taxable in India.

Summary:
Income Source Taxability for R-NOR (PY 15-16)
Income from USA (foreign) Not taxable in India (profession not set up in India)
Income from India (surgery) Taxable in India

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