Hello,
Please answer my question below:
Mr A is an Indian citizen and has been working in USA as salaried employee and has been paying taxes to US government. Mr A has not had any salaried income in India in last 8 years. Mr A current visit to India began on 14Sep2009.
If Mr A stays beyond Mar 2010, will he lose NRI status for year 2009-2010 ?
If so will he have to pay income tax to Indian government on his US income?
Thank You.
Income for 2009-2010 earned in US will not be taxable PROVIDED the person satisfies both of the below conditions:
a)He has not been resident in India in at least 2 out of 10 previous years immediately preceding the year 2009-2010
b)He has not been in India for a period of 730 days or more during 7 years immediately preceding the year 2009-2010
Agree with Mr. Venkat... If the NRI satisfies the above two conditions he will be resident but not ordinarily resident. Hence his income from saleries accrued outside india will not be taxable..
Dear friend,
Just want to add what Venkat sir has rightly said that even in this case Income can be taxed in India if it is FIRST received in India either by assessee or on his behalf..
Sec 9 clearly states that if income is received in India then it will be treated as deemed to accrue or arise in India..
Thanks Mr Venkat, Mr Chintanshah, Mr Amir for your replies.
Salary was paid outside India.
Mr Venkat please tell relevant section, clause and Act number.
On https://law.incometaxindia.gov.in I came across:
1. Definition of 'Not Ordinarily Resident', (site link):
"6) A person is said to be not ordinarily resident in India in any previous year if such person is
(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year,
OR has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less;"
2. Under Taxability of Non-residents in India (site link)
"5. 39 (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which
(c) accrues or arises to him outside India during such year :
Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6)* of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India."
Please comment.
Thank You.
Kindly refer Section 6 of IT Act for conditions relating to residence. Refer Sec 7 and 9 for rules relating to accrual and receipt of income in India.
| Originally posted by : Venkat M | ||
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Kindly refer Section 6 of IT Act for conditions relating to residence. Refer Sec 7 and 9 for rules relating to accrual and receipt of income in India. |
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Thanks Mr Venkat.
Condition (b) is Section 6 clause 6.a of Income Tax Act.
But I have not to been able to locate condition (a) ("He has not been resident in India in at least 2 out of 10 previous years immediately preceding the year 2009-2010") you mentioned, in Section 6.
Please advise.
How is stay in India counted ? How to prove duration of stay ?
CAclubindia
