Q: What are the tax implications of NRI vs Resident status?

NRI: Only Indian income (salary, rent, capital gains in India) is taxable. Resident (ROR): Global income taxable, must report foreign assets (Schedule FA). RNOR: Indian income taxable, foreign income exempt - useful transition status when returning to India.

Question 1

How is residential status determined in India - 182 day rule?

Accepted Answer

If you stay in India for 182 days or more in a financial year (April 1 - March 31), you are a Resident. If less than 182 days, you are generally NRI. However, additional conditions like 60-day rule and 120-day deemed residency rule may apply based on citizenship and income.

Question 2

What is the 60-day rule for Indian citizens and PIOs?

Accepted Answer

Indian citizens and PIOs who stay 60+ days in current FY AND 365+ days in the preceding 4 years become Resident. Exception: This rule does not apply to Indian citizens/PIOs visiting India (crews excluded) or Indian citizens leaving India for employment abroad.

Question 3

What is deemed residency under Section 6(1A) - the 120-day trap?

Accepted Answer

If you are Indian citizen/PIO, stay 120+ days in India, have Indian income exceeding Rs 15 lakh, and are NOT liable to pay tax in any other country, you become 'deemed resident' (RNOR status). This was introduced to catch 'stateless' individuals avoiding taxes.

Question 4

What is the difference between ROR and RNOR status?

Accepted Answer

ROR (Resident and Ordinarily Resident): Global income taxable in India. RNOR (Resident but Not Ordinarily Resident): Only Indian income taxable, foreign income not taxable. RNOR status is available if you were NRI in 9 out of 10 preceding years OR stayed <730 days in India in preceding 7 years.

Question 5

What are the tax implications of NRI vs Resident status?

Accepted Answer

NRI: Only Indian income (salary, rent, capital gains in India) is taxable. Resident (ROR): Global income taxable, must report foreign assets (Schedule FA). RNOR: Indian income taxable, foreign income exempt - useful transition status when returning to India.

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