Hi , I am Richard from Chennai. I returned back from UAE 12/11/2018 after living/working in the middle east over 13+ years. I was staying in India post that & my visa got cancelled by 10/2/2019 from UAE. i filed my taxes for the calendar year FY 18-19 & have filed it for FY 19-20 as an RNOR in India. My questions: 1.)Until what date am i eligible to be an RNOR considering my long stay prior to returning to India?(also considering the new tax amendment that happened in 2020 from the Indian Govt). 2.)I hold an RFC Account and I am bringing in my money generated through investments/loan returns etc that were conducted while I was living overseas.Until what tax FY year can i claim tax free benefits on those incomes.
Hi
The tax benefits can only be claimed till you have a RNOR status. Once you become a Ordinary resident, global income shall be taxable in India.
For RNOR status, any of the following 2 conditions have to be satisfied:
1. NRI in 9 out of 10 previous FY - this won't be satisfied from FY 20-21 onwards.
OR
2. Stay in India in previous 7 FYs (FY 13-14 to FY 19-20) for a period of 729 days or less.
Check for the second condition in your case for eligibility of RNOR status.
Dear Sir,
Hope you are doing well !!
Please check below the conditions for the same:
Resident Not Ordinarily Resident
If an individual qualifies as a resident, the next step is to determine if he/she is a Resident ordinarily resident (ROR) or an RNOR. He will be a ROR if he meets both of the following conditions:
Therefore, if any individual fails to satisfy even one of the above conditions, he would be an RNOR.
NR and RNOR: Their tax liability in India is restricted to the income they earn in India. They need not pay any tax in India on their foreign income.
-Please check your residential status according to above explanations.
You will be RNOR till FY 2020-21.The tax benefits can be claimed for two years. In your case FY 2019-20 and 2020-21.
Thanks a lot guys. I pretty much am aware what constitutes an RNOR status but there is a "grey zone" which am I not able to verify that states a returning NRI ,if he has spent more than 7 years prior to his return "does enjoy up to 2 tax years excluding the returning tax year" on taxation front .Is this fact or not is my specific query. I.e in my case. I returned FY 18-19,am i eligible for this lee way until 20-21 or not? Do please comment
Hello,
You will be considered RNOR if you satisfy one of the two conditions -
(i) If you have been an NRI in 9 out of 10 financial years preceding the year. OR
(ii) You have been in India for a period of 729 days or less during the 7 financial years preceding the year.
Till you qualify as RNOR, income earned in India would be taxable. Once you become a resident, your global income would be taxable in India.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Hi
For the purpose of income tax in India, the income tax laws in India classifies taxable persons as:
a. A resident
b. A resident not ordinarily resident (RNOR)
c. A non-resident (NR)
The taxability differs for each of the above categories of taxpayers. Before we get into taxability, let us first understand how a taxpayer becomes a resident, an RNOR or an NR.
A taxpayer would qualify as a resident of India if he satisfies one of the following 2 conditions :
1. Stay in India for a year is 182 days or more or
2. Stay in India for the immediately 4 preceding years is 365 days or more and 60 days or more in the relevant financial year
In the event an individual who is a citizen of India leaves India for employment during an FY, he will qualify as a resident of India only if he stays in India for 182 days or more. Such individuals are allowed a longer time greater than 60 days and less than 182 days to stay in India. However, from the financial year 2020-21, the period is reduced to 120 days or more for such an individual whose total income (other than foreign sources) exceeds Rs 15 lakh.
In another significant amendment from FY 2020-21, an individual who is a citizen of India who is not liable to tax in any other country will be deemed to be a resident in India. The condition for deemed residential status applies only if the total income (other than foreign sources) exceeds Rs 15 lakh and nil tax liability in other countries or territories by reason of his domicile or residence or any other criteria of similar nature.
If an individual qualifies as a resident, the next step is to determine if he/she is a Resident ordinarily resident (ROR) or an RNOR. He will be a ROR if he meets both of the following conditions:
1. Has been a resident of India in at least 2 out of 10 years immediately previous years and
2. Has stayed in India for at least 730 days in 7 immediately preceding years
Therefore, if any individual fails to satisfy even one of the above conditions, he would be an RNOR.
From FY 2020-21, a citizen of India or a person of Indian origin who leaves India for employment outside India during the year will be a resident and ordinarily resident if he stays in India for an aggregate period of 182 days or more. However, this condition will apply only if his total income (other than foreign sources) exceeds Rs 15 lakh.
Also, a citizen of India who is deemed to be a resident in India (w.e.f FY 2020-21) will be a resident and ordinarily resident in India.
NOTE: Income from foreign sources means income which accrues or arises outside India (except income derived from a business controlled in India or profession set up in India).
An individual satisfying neither of the conditions stated in (a) or (b) above would be an NR for the year.
Yes you are eligible until 20-21.
Hi
Yes, you can enjoy the RNOR status till FY 2020-21 assuming your stay in India in previous 7 FYs (FY 13-14 to FY 19-20) was for a period of 729 days or less.
Hi
Yes you have benefit of RNOR till 2020_ 21 if you have satisfied above mentioned condition w.r.t stay in India.
Yes, you are eligible for FY 20-21.
Dear Sir,
A person will be a ROR if he meets both of the following conditions:
Therefore, if any individual fails to satisfy even one of the above conditions, he would be an RNOR.
In you case as you do not satisfy second condition so you will still be considered as RNOR.
Thanks and Regards
Shiv Kumar Agarwal
Now since for past 2 years you have been resident so it is most probable that from this financial you will turn into resident and ordinary resident.
The new amendment is not for the benefit and it wont affect you.
How were you claiming tax free income on that income earned outside India?
After become ordinary resident your global income would be taxable in India.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
It says 729 days in 7 years and not just 7 years so since you have continuously stayed in India for past 2 years you wont enjoy that.
You would be considered RNOR till F.Y. 2020-21 considering you qualify the second condition of 729 days or less in the last 7 years.