Clarification on residential status and implication on taxes

Dear Sir,

I am an employee of an Indian company drawing salary in Indian rupees. For the last two years I have been deputed abroad on a long term project and since then have visited India only for two weeks in the year.

Abroad, Im paid only for my living expenses in the local currency and do not earn any salary.

Kindly advice

1. If I need to disclose myself as an NRI in the Income tax return.

If yes,

a Do I have change my salary account & other bank accounts in India to NRE/NRO account

b. What would be the implications on rental income received on my house property in India.Would the tax rate differ?

c . What would be the implications on my demat account in India and will I be eligible to continue with my share trading in India.

Thank you in advance.

Dear Priya

As per section 6 of income tax act 1961 :- A person shall be resident in India if he/she is in India for a period of 182 days during the previous year.

1. For 2012-13 :- if you were in india for 182 or more days in india during the FY 2012-13 than your residential status was "Resident in India".

As per section 4 of income tax act 1961, The all income earned by a resident in India or Outside India will be taxable in India.

2. For 2013-14 :- As you mentioned, you were deputed in the year 2012-13 in foreign for employement perposes, so condition of 182 days under section 6 of income tax act 1961 could not fullfil during the year 2013-14. And your Residential status become Non- Resident India Indian in that year.

You could show yourself as NRI in Income tax Return but all income earned or recived in India will be taxable in Your Hand.

As per section 9 of Income Tax Act 1961 "Income Deemed to be Accrued or Arise in India", Any Income Accrued or Arise during the previous year from Indian Source will be taxed in India in the hand of NRI.

So Income Earned as

-Salary

-Rent

- or any other way taxable in your Hand.