How to compute tax on income of NRI person

Tax queries 724 views 3 replies

MK SINGHAL

PARTNER

28 Points Joined November 2010

X is a young Indian boy of 25 years who is now living for last two yrs in Mexico. He is doing business there. He is regularly bringing lakhs of rupees in India as his income earned in Mexico for last two yrs. Income is being brought by him through his NRE account and also through wired transfer to his own and his father's account in India. He is depositing the money in FDRs in India and is earning interest on these FDRs and also from his past investments. His indian income is also taxable.

Whether he is liable to file IT return in India? What treatment shoudl be given to his income that has accrued to him in Mexico but is subsequently brought to India? If it is exempt from tax, under which section and where to fill this income in ITR form? If or not he is required to comply FEMA provisions also in respect of his money brought into India.

Replies (3)

Murtuza Roshan

Practicing Chartered Accountant

437 Points Joined July 2010

It is queit a technical question Mr. Singhal for which exact answers cannot be given with the details U hav provided!!

Firstly residential Status should be found, Incase of Resident but not ordinary resident mere remittance will not be treated as income as u know!!!

Interest earned from india will be taxable!!!

If total income is beyond taxable limit then it is advisable to file the return!!!

priyanka

CA Final student

895 Points Joined July 2010

but mr roshan, since X is not able to satisfy any of the two conditions(182days as well as 60 days) for being a resident, he shall be considered to be a non-resident, and not NOR. Moreover, incomes taxable in case of NOR are:

1)income accruing/deemed to be accruing in india

2)income recieved/deemed to be recieved in india

In the given case, lacs of rupees brought into india by X are not recieved in india. They are merely remitted to india.

CA. Anuj Gupta

Practices in NRI Int.Tax FEMA TP FD

7024 Points Joined May 2007

Here the income earned from deposits from FDR shall be taxable even if the person is non resident because as very correctly pointed out by Priyanka that ,incomes taxable in case of NR are: 1)income accruing/deemed to be accruing in india 2)income received/deemed to be received in india In present case the income is being received as well as accruing/arising in India.