If you had just gone last year, how do you check whether you are an NRI or not? Well, this guide will help you to determine your NRI status. In general, if a person stays more than 182 days outside of India in a given financial year, then he is considered as NRI (Non Resident Indian) for income tax purpose, but there are more to it. In this tutorial, I'll explain how to check NRI status in detail and why it is important to find out NRI status before filing an income tax return.
One of the most common doubts for new NRIs, i.e. individuals migrating overseas for employment or business purpose in the current financial year to determine their NRI or Resident status for income tax filing purposes. Since resident and non-resident has different taxation requirement (it's not mandatory for NRI to file an income tax return), it's extremely important for you to determine your correct residential status for the current financial year.
Remember, if you turn out to be a resident for a financial year then your Global income is subject to tax in India, which means you could be paying tax on two countries i.e. country of residence and India. Though, you can avoid or get a concession if the foreign country has DTAA with India, like the USA. A financial year in India starts on 1st April and ends on 31st March.
2) When he stayed in India for less than 182 days and left the country for employment or a crew member of the Indian ship.
3) When he stayed in India for less than 182 days, and an Indian Citizen or Indian Origin visited India in Preceding Previous year
4) When a person has stayed more than 60 days but less than 365 days in last 4 preceding previous year.
2) If he stays greater than 60 days in the current financial year and greater than 365 days in 4 previous preceding years.
Again a Resident individual for income tax purposes can be Resident and Ordinary Resident (ROR) or Resident but Not Ordinary Resident (R & NOR).
1) An individual becomes Resident but Not Ordinary Resident (R & NOR) if he stays more than 182 days in India in current financial years but Non Resident (NR) for last 9 years or 9 Preceding Previous Year.
2) An individual will also be treated as R & NOR if he stayed more than 182 days in current financial years, but less than 729 days in 7 preceding the previous year, otherwise, he is a ROR (Resident and Ordinary Resident)
See this diagram to get a more clear idea, it explains very clearly when a person is NRI and when he is not.
That's all about how to check whether a person is NRI or not for a given financial year. In short, if a person stays more than 182 days abroad in a financial year, then he is considered an NRI for income tax purposes. There are more subtle details depending upon several other factors, but that is the bottom line.
You should also know when does an NRI needs to pay income tax in India as it's not mandatory for him if he doesn't have any income in INR or generated from India.
One of the most common doubts for new NRIs, i.e. individuals migrating overseas for employment or business purpose in the current financial year to determine their NRI or Resident status for income tax filing purposes. Since resident and non-resident has different taxation requirement (it's not mandatory for NRI to file an income tax return), it's extremely important for you to determine your correct residential status for the current financial year.
Remember, if you turn out to be a resident for a financial year then your Global income is subject to tax in India, which means you could be paying tax on two countries i.e. country of residence and India. Though, you can avoid or get a concession if the foreign country has DTAA with India, like the USA. A financial year in India starts on 1st April and ends on 31st March.
An Individual become NRI (Non Resident Indian) :
1) When he stayed in India for less than 60 days in a financial year.2) When he stayed in India for less than 182 days and left the country for employment or a crew member of the Indian ship.
3) When he stayed in India for less than 182 days, and an Indian Citizen or Indian Origin visited India in Preceding Previous year
4) When a person has stayed more than 60 days but less than 365 days in last 4 preceding previous year.
When an individual is resident for Income tax purposes?
1) If he stays in India for more than 182 days in a financial year.2) If he stays greater than 60 days in the current financial year and greater than 365 days in 4 previous preceding years.
Again a Resident individual for income tax purposes can be Resident and Ordinary Resident (ROR) or Resident but Not Ordinary Resident (R & NOR).
1) An individual becomes Resident but Not Ordinary Resident (R & NOR) if he stays more than 182 days in India in current financial years but Non Resident (NR) for last 9 years or 9 Preceding Previous Year.
2) An individual will also be treated as R & NOR if he stayed more than 182 days in current financial years, but less than 729 days in 7 preceding the previous year, otherwise, he is a ROR (Resident and Ordinary Resident)
See this diagram to get a more clear idea, it explains very clearly when a person is NRI and when he is not.
That's all about how to check whether a person is NRI or not for a given financial year. In short, if a person stays more than 182 days abroad in a financial year, then he is considered an NRI for income tax purposes. There are more subtle details depending upon several other factors, but that is the bottom line.
You should also know when does an NRI needs to pay income tax in India as it's not mandatory for him if he doesn't have any income in INR or generated from India.
Other NRI Income tax articles you may like
3 Income tax benefits of opening NRI accounts in India
13 ways to save income tax in India
10 Income tax deductions and exemptions NRIs should know
How NRIs can file their income tax returns online
Is NRIs overseas income taxable in India
How much TDS is deducted from the NRO account?
Is it mandatory to file income tax returns for NRIs?
Is it mandatory for NRIs to declare foreign bank accounts on tax returns?
How to determine the residential tax status of NRIs?
10 points NRIs should know about Income tax?
Is Aadhaar card Mandatory for filing an Income tax return for NRIs?
Thanks for reading this article so far, if you like this article, then please share it with your friends and colleagues. If you have any questions or feedback, then please drop a note.
3 Income tax benefits of opening NRI accounts in India
13 ways to save income tax in India
10 Income tax deductions and exemptions NRIs should know
How NRIs can file their income tax returns online
Is NRIs overseas income taxable in India
How much TDS is deducted from the NRO account?
Is it mandatory to file income tax returns for NRIs?
Is it mandatory for NRIs to declare foreign bank accounts on tax returns?
How to determine the residential tax status of NRIs?
10 points NRIs should know about Income tax?
Is Aadhaar card Mandatory for filing an Income tax return for NRIs?
Thanks for reading this article so far, if you like this article, then please share it with your friends and colleagues. If you have any questions or feedback, then please drop a note.
Hi, I have question on my NRI status. I spent initial 181 days in India & then moved out of country. However due to some unavoidable family urgency, I came to India & spent next 60 days there. During this period I was an employee of foreign entity & mostly was on leave. In this case, what will be my NRI status?
ReplyDeleteHello @Anonymous, you didn't mentioned the actual date, which is key because if they overlap between two financial year then calculation will change. Given your situation, I assume all dates for same financial year e.g. between 1 april 2015 to 31st March 2016. Since you spent less than 181 days overseas, you will be considered resident India for taxation purpose and your global income will be taxed in India. If you already paid tax on Foreign country then you can use DTAA to pay less tax in India. I suggest, hire a chartered accountant, he will guide you better on tax saving.
DeleteHi, NRI status seems little confusing. Say I migrated outside India in last FY for employment and spent more than 182 days in India, so for last FY I will be straight away considered as resident. In current FY, how many days I can be in India in order to be considered as NRI from tax perspective?
ReplyDeleteWhen an Individual is resident for Income tax purpose
ReplyDelete1) If he stays in India for more than 182 days in a financial year.
2) If he stays greater than 60 days in current financial year and greater than 365 days in 4 previous preceding years.
This is little confusing & contraindicating with statements for NR.
So if I spend less than 60 days in India in current FY but since I have spent more than 365 days in India in 4 previous preceding years, will I be resident?
Below statement says that I am NR if I spend less than 60 days in a FY.
An Individual become NRI (Non Resident Indian) :
1) When he stayed in India for less than 60 days in a financial year.
Please elaborate if possible. Thank you. :)
My case is a bit different. I went to USA on family sponsored Green Card & left India on Sept 20, 2016. That means my stay in India was less than 182 days. But I according to my view satisfy the 2nd condition (If he stays greater than 60 days in current financial year and greater than 365 days in 4 previous preceding years) to qualify to be Indian Resident. Will some please one give me the correct view so that I can indicate the same in my ITR?,
ReplyDeleteHello @Anonymous, if you didn't went abroad for employment and spend more than 365 days in India in last 4 years then also you need to answer few questions e.g.
DeleteHave you been a resident of India in the past 2 out of 10 preceding years? If Yes, then How long have you been in India for last 7 years? If less 729 days then you are an RNOR (Resident but not Ordinary Resident). If you spent more than 729 days then you become ordinary resident.
You can also check this NRI status calculator for easier identification of your NRI residential status.
HI, i need to know that is there any official method to certify the RI/ NRI status for a individual? coz my employer is forcing RI status on me but as per my findings and discussions with CAs its NRI.. my case details are as below.
ReplyDeleteI was sent out of India for employment purpose from my company (was paying taxes as per foreign country laws), my departure date from India was 2- Aug-2015, and arrival date was 3-Oct-2016.. so my stay in India for both FY was less then 180 days.
What if I am a OCI and now a Indian Tax resident and want to trade stocks. Now can i just open a resident Demat account(non-repatriatable basis) and a resident trading account? I also now will have to convert my NRO bank a/c to a domestic account. So no PIS etc will be possible. I understand that the restrictions of cannot own more than 10% of a company and no agricultural land type real estate ownership. But for this what RBI or FEMA circular to point to?
ReplyDeletei went to UK on 2016 Feb 28 on an onsite assignment (as an employee of the UK company in the UK payroll) and came back to India on 2018 Jan 25. Since I left India for employment purpose, and my stay in India during FY2017-18 is less than 182 days , for the FY 2017-18 will I be considered as Resident in India?
ReplyDeleteI had stayed in India more than 60 days but less than 182 days in current year that is 1 april 2018 to 31 march 2019 , but stayed less than 365 days in the previous 4 years 1 april 2014 to 31 march 2018. Only in current year my stay in abroad was not on employment.
ReplyDeleteAM I NRI ? for the year 2018 to 2019.
Hello @Satyamurthi, did you follow the chart? to me it looks like NR status but if you still have doubt checkout this Residential Status Calculator from ClearTax
Deletehttps://cleartax.in/paytax/residential-status-calculator
Namaskaram,
ReplyDeleteIf we have a land lord who might or might not have become NRI for a financial year, how will the tenant know and verify. Should he keep a tab on how much his land lord spends his time in INDIA or abroad.
It is whose responsibility to declare the residential status. The land lord may cheat the tenant by declaring he is a resident though he is an nri.
Also the tenant may not be aware at all that his land lord is staying abroad for more than 182 days. How can a layman know about these residential status thigs.
If the tenant is unaware how can he prosecuted for not withholding the tds.
The law must fill these loop holes and help the general citizen. Making a law whih has an intrinsic loop hole brings room for corruption and unnecessary advantages taken by some parties.
You have some valid points but I suggest you just get this in writing from your landlord that whether he is in NRI or not, better in the rent agreement and do accordingly.
DeletePlease see if you can help.
ReplyDeleteI am US citizen and also an OCI card holder living in India continuously for last 12 years (365 days every year). Now I am planning to relocate to USA on July 30, 2020. Although my stay in India for FY 2020-21 would be less than 182 days but will be 60 days or more in FY 2020-21 and also 365 days or more during the preceding 4 fiscal years.
Please advice on my residential status for FY 2020-21(AY 2021-22)??? Would appreciate any input from you to attain Non Resident status for coming years as I will be staying for more than 60 days in India in future too.
This query arose because of fact that if verbiage of more than 60 days stay in India is substituted with 182 days for PIO or OCI holders. Also if this would apply in my case as I will not be visiting but leaving India after staying for more than 60 days in FY 2020-21.
(being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted.
Regards.
Pancham Sharma
Hello Pancham, It seems you will be an ordinary Indian resident for FY 2020-21, but there are a couple of more questions needs to be answered like
Delete1. Have you been a resident of India in the past 2 out of 10 preceding years?
2. How long have you been in India for last 7 years?
Less than 729 days
More than 729 days
You can also check your status on cleartax residential status calculator
https://cleartax.in/paytax/residential-status-calculator
Answer to questions;
ReplyDelete1. Have you been a resident of India in the past 2 out of 10 preceding years?
YES
2. How long have you been in India for last 7 years?
MORE THAN 729 days
I guess 60 days substitution with 182 days for PIO/OCI does not apply in my case although I am PIO.
When I checked residency calculator on ClearTax it designated me as Non Resident when I put myself with more than 60 days stay in India and as PIO. Please clarify.
Thanks and regards.
Pancham
Did you been in India for job or for visit? If for job then yes, you are NRE
DeleteI was visiting to take care of my 84 year old parents. That was the purpose of visit that started 12 years ago.
ReplyDelete{being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted}
Thanks & regards.
Pancham
Please respond if possible.
Delete