Residential status and lax liability confusion

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Mitesh Jain (Querist)
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07 March 2023 Hello,
I had a query about my Residential status. This is the first time I have moved from India to UAE. I am a freelancer and I have moved on Virtual Work Visa scheme in UAE and currently working for US and EU clients from UAE remotely as self employed.

- Income earned in India >=15L
- In India <175 days (Apr'22 to Sept'22)
- Not Liable for tax in any country as UAE is 0% tax

I want to understand what will be my Residential status (I think it is coming as RNOR?) and will my foreign Income be liable to tax In India?

What is the meaning of profession set up in India in the statement for tax liability for RNOR "Income accruing outside India from a business controlled from India or from a profession set up in India"? - Does this apply to me?

I used to be a freelancer / self employed Individual In India as well (Only for overseas clients) but have stopped this activity and no longer control or operate It from India after moving to UAE.

Can someone please assist with these queries?

Thanks,

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 March 2023 Your stay in India being more than 170 days in PY, you will be Resident Indian (ROR) by virtue of sec. 6(2) r.w.s. 6(6) of IT act.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 March 2023 You will be non resident of India, if you are resident of UAE staying more than 182 days in UAE.
The Finance Act, 2020, w.e.f., Assessment Year 2021-22 has amended the above exception to provide that the period of 60 days as mentioned in (2) above shall be substituted with 120 days, if an Indian citizen or a person of Indian origin whose total income, other than income from foreign sources, exceeds Rs. 15 lakhs during the previous year. Income from foreign sources means income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India).

Note: The Finance Act, 2020 has introduced new section 6(1A) to the Income-tax Act, 1961. The new provision provides that an Indian citizen shall be deemed to be resident in India only if his total income, other than income from foreign sources, exceeds Rs. 15 lakhs during the previous year. For this provision, income from foreign sources means income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India).

However, such individual shall be deemed to be Indian resident only when he is not liable to tax in any country or jurisdiction by reason of his domicile or residence or any other criteria of similar nature.

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