As per NRI Taxation Rules, the residential status of an individual is determined based on their physical presence in the country during a financial year and the last 10 preceding years.
Latest NRI Taxation Rules in India
The residential status of a person needs to be re-determined every year. There are some conditions mentioned in the taxation rules under which a person is declared as a resident or Non-Resident.
List of Conditions Under Which a Person is Declared Resident
- A minimum of 182 days or more physical presence is required in India for the relevant financial year.
- A person should be present for almost 60 days or more for the relevant FY and a total of 365 days or more in the preceding four financial years.
- A person is a citizen of India having a net income, and other income from foreign sources which exceeds ₹15 lakh for the relevant financial year and he is not liable to pay taxes in any other country or territory or region due to his resident status or domicile.
Deemed Residency Rule in India for NRI Taxation Rules
“The 60-day condition is extended to 182 days if the individual, being an Indian citizen, is leaving India for employment outside India. It is extended to 120 days for an individual, being an Indian citizen or person of Indian origin (PIO), who is based outside India and comes on a visit to India, if the total income of a such person, other than income from foreign sources exceeds ₹15 lakh (120 days rule). However, if his total income (other than income from foreign sources) is up to ₹15 lahks then 60 days’ condition is extended to 182 days,” mentioned by Livemint.
Both the deemed residency rule and 120 days resident rule has been in effect from the financial year 2020-21.
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Types of Incomes on Which NR is Liable to Pay Taxes:
- Any source of income accrued or arises in India.
- Any deemed to arise income in India.
- Income received or deemed to be received in India.
