What are the conditions to become non-resident for income tax goal?

My son who’s working overseas had by no means had his whole taxable income in India greater than 15 lakh. Particulars of his in India in previous 5 years are as below:

2017-18     14

2018-19     128

2019-20     115

2020-21     NIL

Sub- whole:   257 days

2021-22     135 ( until fifteenth March, 2022)

One of the provisions of Income Tax Act stipulates that for sustaining standing as non-resident, your keep in India in 4 years previous the earlier year shouldn’t exceed twelve months. But keep of my son in India in in 4 years 2018-19, 2019-20,2020-21 and present year 2021-22 has already totalled 378 days , how would it not have an effect on his residential standing in monetary year 2022-23? Can he keep in India in present year 2021-22 in March until thirty first March 2022 with out affecting his standing as non-resident in 2022-23? To be sure that he stays non-resident subsequent year (2022-23) to what number of days his keep in India needs to be restricted for the year 2022-2023?

There are two fundamental conditions primarily based on bodily keep in India for figuring out whether or not you are a resident or no resident. You become a non-resident in the event you fulfill any of the conditions. The first situation prescribes a bodily keep of lower than 182 days in India throughout the related year. The second situation prescribes your bodily keep in India throughout the 4 years previous the related monetary year lower than 365 and fewer than 60 days throughout the related monetary year. So in case an individual satisfies any of two conditions, he turns into non-resident for tax functions. Please observe that the conditions of bodily keep in the second situation for twelve months in 4 years previous the monetary year and 60 days throughout the related monetary year are cumulative.

So allow us to first examines the first situation for your son. Since his bodily keep in India goes to be lower than 182 days even when he stays right here until thirty first March 2022, he stays non-resident for the present monetary year. Now allow us to see whether or not your son will stay a non resident for the subsequent year too. Under the first situation he’ll become a non-resident subsequent year if he stays in India for 182 days or extra throughout the subsequent year. However, as his mixture bodily keep throughout the 4 years (1918-19 to 2021-22) previous the year 2022-2023 has already cross twelve months he’ll become resident if he stays in India for 60 days or extra in the monetary year 2022-2023 below the second situation. So your son has to guarantee his keep in India lower than 60 days subsequent year to stay a non-resident for the subsequent year too. 

Balwant Jain is a tax and funding knowledgeable and will be reached on [email protected] and @jainbalwant on Twitter.

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