RESIDENT OR NON RESIDENT ?
Me and my wife had left India on 21st April, 2023 for U.S.A., will be returning to India on 9th October, 2023 only to go back again to U.S.A. on 8th November, 2023 to finally return to India on 1st May, 2024. Hence during the financial year 2023-24, we will be staying in India for 52 days only. We visit U.S.A. on B1/B2, Visitor visa only.
As per Indian Income Tax Act, if a Resident Indian does not stay in India at least for a
Minimum of 60 days in a financial year and at least 365 days in the entire 4 preceding years, he will be considered to be NON RESIDENT. In such a scenario,
all our resident Bank deposits will have to be converted into NRO accounts, resulting in our paying a TDS of 30.9% , though we may later on, file our ITR and claim refund depending upon our respective I.T. slab and consequential tax on the income. In ITR also we may have to declare ourselves as NON RESIDENT
for the financial year 2023-24. Again in 2024-25, if we stay in India only, we may
have to flip our deposits into ordinary Resident deposits again.
Is the above position of treatment of our residential status correct or will we
continue to be Resident only from the Income Tax angle?
Or without bothering about all these above, is it okay to continue to declare our
Status as Resident only in ITR & without disturbing the status of the deposits & ‘
leave them as such, as only Resident Deposits. Will there be any repercussions?
we have not left India for any employment overseas, or for any indefinite period? I'm a retired guy of 72 years of age and my wife 68 years of age & we both live in India only, visiting my son & daughter-in-law in U.S.A. occasionally.
Who is RESIDENT in India?
A person would be a RESIDENT of India for income tax purposes if-
He/she is in India for 182 days or more during the financial year.
OR
If he/she is in India for at least 365 days during the 4 years preceding that year AND at least 60 days in that year.
In the light of the above, Will you please clarify in detail, as to what we're supposed to do.
RESIDENT OR NON RESIDENT ?
Replies (2)
Quick Summary
Sec 6(1) of the income tax act 1961
Residential status depends on days in India:
• For FY 2023-24 (1 April 2023 to 31 March 2024): you left on 21 April 2023 (about 21 days in India). If you return after 31 March 2024, your stay in FY 2023-24 is only about 21 days. You're non-resident for FY 2023-24 (less than 60 days; the 182-day test also fails).
• For FY 2024-25: depends on days after return. If 182 days or more, resident. The 60 days + 365 days in 4 preceding years test applies (for citizens visiting India, 60 is replaced by 182, or 120 if Indian income is above Rs 15 lakh).
• Indian income (interest, rent, capital gains) is taxable regardless. Foreign income (US salary) is taxable in India only if resident (and ROR).
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