Residential Status and filing of returns

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This discussion clarifies the tax residency status for an Indian citizen studying abroad. For FY 2022-23, the individual is considered a 'Resident' of India due to spending more than 60 days in the country, despite being abroad for part of the year. While not mandatory to file returns with income below the exemption limit, it is advisable. The discussion also touches upon declaring foreign income earned while studying abroad, noting it may be required if tax was withheld and a Tax Residency Certificate (TRC) is available, potentially referencing Double Taxation Avoidance Agreements (DTAA).

madhuri bariya

madhuri bariya (Querist)
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23 July 2023 A person went abroad for study purpose on 1st September 2022. He was Indian Citizen and has been in India since birth. This is the first time he went abroad on 1st September for study purpose. To meet the living expenses he was doing part time work in a Coffee shop. His income in India since he started filing his IT returns was below 5 lacs and he has been filing his IT returns.
So for the FY 2022-23,
1. what would be his residential status for FY 2022-23 and also for FY 2023-24?
2. is it required to show his part time income earned in dollars for the FY 2022-23 IT return?
3. Since he was in India for 5 months(April till August) in FY 2022-23, he didn't have much income(Lets say he was having approx. 1.5 lacs only). So, is he required to file his returns?

Request to give advice/clarification on this.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 July 2023 1. NRI for both the years. (unless he returns back before 30.09.2023)
2. No.
3. Better to file ITR be it below exemption limit. Though it is not mandatory.

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madhuri bariya

madhuri bariya (Querist)
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24 July 2023 Thank you for your response.
But as per condition 2 of the Residential status: which states that - Resides in India for the immediately 4 preceding years is 365 days or more and 60 days or more in the current financial year, then that person would be a resident of India.
He was 153 days in India for the year 2022 which is more than 60 days.
So, does this satisfy the condition?
and
He will be in abroad for the whole year 2024 too

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 July 2023 Yes, he satisfies the condition and will be 'Resident' for FY 2022-23.

madhuri bariya

madhuri bariya (Querist)
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24 July 2023 Thank you for your response.
So for question 2. Does he need to show his part time income being student earning to meet living expenses in abroad?
Is there any points in the DTAA between India and Canada ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 July 2023 Yes, if any tax is withdrawn over the income and if he has the TRC.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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13 September 2024 Good luck.

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