Go AD-Free with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Residential status - clarification required

ITR 373 views 8 replies

BALAKRISHNAN M V

Assistant Accounts Manager

12 Points Joined June 2010

I was working abroad from 31 July ,1991 until September 15 ,2018 . During my stay overseas I used to visit India every year and stay for about 30 days on an average . In the year 2018 , I came to India on the 6th May 2018 and left on the 22nd Jun 2018 . I thereafter permanently returned back to India on the 15th September , 2018 .

I had been filing my INCOME TAX RETURNS until A Y 2018-2019 as a NON-RESIDENT .

I have two questions to be clarified concerning my residential status :-

1. For AY 2019-2020 what would be RESIDENTIAL STATUS while filing the INCOME TAX RETURN

2. I hold two NRE Accounts and one NRO bank account jointly with my wife who is the first account holder in all these bank accounts . Should I open RESIDENT BANK ACCOUNTS to replace the NRE bank accounts considering the fact that I have permanently relocated back to India ?

Replies (8)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

210370 Points Joined July 2016

1. You will be considered Resident but Not Ordinarily Resident in the year.

2. No need till you are completely ROR.

rama krishnan

12244 Points Joined May 2017

agree with Mr. Dhiraj sir view

Anoopa H P

Member of ICAI CS Executive

192 Points Joined November 2009

1. For the AY 2019-20, You will be considered as Resident but not ordinarily resident.
2. In coming year, you need to open Resident bank account as per above facts.

BALAKRISHNAN M V

Assistant Accounts Manager

12 Points Joined June 2010

Thank you sir..

BALAKRISHNAN M V

Assistant Accounts Manager

12 Points Joined June 2010

Thank you .

BALAKRISHNAN M V

Assistant Accounts Manager

12 Points Joined June 2010

Thank you .

Zeal Bangdiwala

Partner at N. Gamadia & Co.

363 Points Joined June 2012

You will be a resident but not ordinary resident for the AY 2019-20 as per Income Tax Act, but however there is no concept of Ordinary or Non-ordinary resident under FEMA, hence under FEMA you are a resident and cannot continue with NRE/NRO account. You have to switch to normal savings account or else there can be heavy compounding fee levied by RBI in this matter.

Also, you will be a resident of USA for calendar year 2018 as per the Federal Tax Code of US, and you shall need to apply Tie Breaker Rule under DTAA for your residential status.