DTA Agreements can lower tax bill for NRIs
Last updated: 17 October 2007
Follow on
Google News
Taxation can be a complicated issue for a non resident (NRI). He may be subject to tax in India on some income and further doubly taxed in both countries on another source of income. This situation of double taxation can be avoided by appropriate planning, taking into consideration the provisions of the relevant Double Taxation Avoidance Agreement ( or Tax Treaty) entered by India with the relevant country and availing the benefits, if any.
An individual who is no longer staying in India, (generally referred to as a Non-Resident Indian), typically has passive income (eg: dividend, interest) and/or active income (eg: business income) streams arising from India.
Because an individual has recently migrated from India, it does not automatically make him a non resident under the Indian Income tax Act, 1961 (the Act). Classification under the Act, for tax purposes, depends on the number of days stay in India during the specified period, as explained in the subsequent paragraphs.
While the Act levies tax on Indian sourced income of an NRI - if he is a non resident, as defined under the Act, there could be circumstances where an NRI is liable to tax in India on his worldwide income.
Residential status under the Act
Under the Act, the scope of taxable income varies with the residential status of the individual. The Act prescribes two tests of residence for individual taxpayers. Each of the two tests relate to the physical presence of the individual in India in the course of the 'tax year'. An individual is said to be a resident in India in the tax year, if he is:
a) Physically present in India for 182 days or more in that tax year; OR
b) Physically present in India for 60 days in that tax year and 365 days or more in the preceding four tax years.
News posted by
CCI News Desk
Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.
Comments
Recent News :
- GSTAT Appeal Filing Deadline Extended Till 31st July 2026
- ICAI Strengthens AI Push with Sarvam AI Partnership and New AI Certification Course
- RBI Issues Credit Derivatives Master Direction 2026
- CBDT Notifies University of Hyderabad and PHFI as Approved Scientific Research Institutions Under Income Tax Act, 2025
- MCA Releases Corporate Mitra Scheme Guidelines 2026
- ICAI, ICSI, ICMAI & IIT Madras Join MCA's Corporate Mitra Scheme for MSME Growth
- Income Tax Department Enables Online Challan Correction Facility
- RBI Withdraws Obsolete FEMA Circulars to Simplify Foreign Exchange Regulatory Framework
- RBI Issues TReDS Directions 2026, Simplifies Framework for MSME Financing
- ICSI Urges Members to Update Contact Details Ahead of Election Process
Popular News
- MCA Releases Corporate Mitra Scheme Guidelines 2026
- GSTN Issues Advisory on e-Invoice API and e-Way Bill by IRN API Changes Effective from 1st August 2026
- MCA Extends DPT-3 Filing Due Date: No Additional Fees Till 31st July 2026
- RBI Streamlines Payment System Regulations with Comprehensive Master Directions
- Income Tax Department Enables Online Challan Correction Facility
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
