RNOR or NRI?

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This discussion clarifies the difference between Non-Resident Indian (NRI) and Resident but Not Ordinarily Resident (RNOR) tax statuses in India. The original poster, who moved to the Middle East for employment and is a shareholder in their company there, sought to understand their status and how to offset business losses. The consensus is that given the circumstances, particularly employment abroad, the individual is likely an NRI, and RNOR status is not applicable. The conversation also touches upon specific tax form declarations for foreign directorships and unlisted shares.

Guest

Guest (Querist)

06 June 2024 I moved to Middle East last year where I started a company and was an employee of that company.

Number of days in India in FY 2023-24: 180
(Indian) business loss brought forward from FY 2022-23 to FY 2023-24: -20L
Profit from (Indian) business for FY 2023-24: 30L

My understanding of NRI status:
- Gone outside India for purpose of employment
- In India for less 182 days
- Total income from India less than 15L

My understanding of RNOR status:
- Gone outside India for purpose of employment
- In India for less 182 days
- Total income from India more than or equal to 15L

Is my understanding of NRI and RNOR status current?
Will my "Total Income" be 30L or 10L (30L - 20L offset from last years loss)?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 June 2024 You can't be employee of your own company. You have gone Middle East for business.
You are resident of India for FY 2023-24.

Your understanding of NRI and RNOR is wrong.

Guest

Guest (Querist)

07 June 2024 Thanks for the response.

Incase I didn’t explain properly, I want to add clarification points:
I went to Middle East on employment visa. I am employee of the company in the Middle East (i.e I receive monthly salary, have employment contract etc). But I am also one of the shareholder of that company.

Note: The business income I mentioned in India is stock market trading income which I was doing part-time before I moved out of India, and is unrelated to the company/business in the Middle East.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 June 2024 In such a case you are NRI.
As you are resident of Middle East RNOR not applicable.

Message likes : 1 times

Guest

Guest (Querist)

07 June 2024 Thanks for the clarification.

As an NRI, I found out that I can leave the FSI and FA blank.
But there are other fields in “PART A - General” regarding director and unlisted shares.

Do I need to declare if I am director/shareholder of a foreign unlisted company? Or can I leave those 2 questions blank?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 June 2024 Leave it, as you are not a director of Indian company.
Only Indian company director details to be filled.

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