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Section 89A if become NRI in future years

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nkj81

39 Points Posted on 20 July 2022

I am currently a resident taxpayer with a foreign retirement account. There is a good chance that I return back to USA after 4 years and again become NRI.

In such a case, as per the rule 21AAA all accrued income will be taxed in the year preceding the previous year. Does this mean this will have an interest and penalty component? Do I need to amend the tax return?

My main question is: If I have a good chance (not sure) of becoming NRI again (before withdrawal) should I still opt for 89A?

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Quick Summary

This discussion explores the tax implications of Section 89A for individuals who are currently resident taxpayers but may become Non-Resident Indians (NRIs) in the future. The user is concerned about potential interest and penalties if accrued foreign retirement account income is taxed upon becoming an NRI, and whether filing Form 10-EE to opt for Section 89A relief is advisable given this future possibility.