Non resident income
This query is : Resolved
06 May 2018
IF A PERSON IS NRI IN FY 2016-17 AND IS EARNING SALARY OUTSIDE INDIA. IN OTHER WORDS SALARY IS ACCRUED AND RECD. OUTSIDE INDIA. AS PER THE IT ACT IF INCOME IS ACCRUED AND RECEIVED OUTSIDE INDIA THEN THERE IS NO TAX LIABILITY IN INDIA.
BUT IF HE REMIT A LUMPSUM MONEY TO A BANK A/C IN IINDIA, DURING THE PREVIOUS YEAR 2016-17 & 2017-18 THEN WHAT WILL BE THE CIRCUMSTANCES REGARDING TAXABILITY . PLZ REPLY
BUT IF HE REMIT A LUMPSUM MONEY TO A BANK A/C IN IINDIA, DURING THE PREVIOUS YEAR 2016-17 & 2017-18 THEN WHAT WILL BE THE CIRCUMSTANCES REGARDING TAXABILITY . PLZ REPLY
06 May 2018
Money remitted to India is an 'application' of his income earned abroad and hence
not taxable in India.
not taxable in India.
06 May 2018
But as I went through the provision of IT Act, it comes out that if income is earned during the P.Y and remitted to India during same P.Y then it will be taxable and vice versa is not taxable I.e if accrued and recd during PY and remitted in corresponding AY.
07 May 2018
For NRI status persons , any money sent from abroad to India in NRE account only . All such Income is not taxable .
07 May 2018
SIR, YOU MEAN TO SAY THAT IF THE MONEY IS REMITTED TO NON NRI A/C THEN IT WILL BE FULLY TAXABLE, NO MATTER WHEN THE MONEY IS BEING REMITED.
IS THIS CORRECT?
IS THIS CORRECT?
07 May 2018
In fact , you as NRI can have only NRE A/C officially to deal with remittance from abroad.HENCE U CAN TRANSFER YOUR MONEY IN NRE account only . However , if you have transfered foreign money to your Indian account by mistake ( account which was held prior to NRI status and still continuing not closed / or coverted to NRE a/c after NRI status , which is wrong as per IT rules ) , you
should not transfer any amout in your name to any indian account with resident status. But as you have transfered the money in your no NRE a/c in PY's , so declare in your IT return as non -taxable amount/Income in ITR-1 OR 2 Schedule - EI (exempt income) and keep records how it was Foreign income and sent through some exchnage in abroad etc.
should not transfer any amout in your name to any indian account with resident status. But as you have transfered the money in your no NRE a/c in PY's , so declare in your IT return as non -taxable amount/Income in ITR-1 OR 2 Schedule - EI (exempt income) and keep records how it was Foreign income and sent through some exchnage in abroad etc.
07 May 2018
And convert you such all indian A/C in your name as NRE by declaration to bank along with Passport + Visa + employement copy etc.
07 May 2018
Sir, can I convert my existing a/c to NRE a/c and have more than one NRE a/c.
07 May 2018
Yes u can convert such indian account to NRO account which can be any nos.
But these account cannot be opeb NRE accout in any branch unless that Branch has NRE facility .
But these account cannot be opeb NRE accout in any branch unless that Branch has NRE facility .
07 May 2018
I mean u need to open new NRE account any nos.
Indian accounts are converted to NRO account only but not to NRE when u become NRI. OK
Indian accounts are converted to NRO account only but not to NRE when u become NRI. OK
07 May 2018
I mean u need to open new NRE account any nos.
Indian accounts are converted to NRO account only but not to NRE when u become NRI. OK
Indian accounts are converted to NRO account only but not to NRE when u become NRI. OK
22 May 2018
IF AN ASSESSEE IS EARNING EXEMPT INCOME OR SAY NIL INCOME; THEN HE/SHE CANT CLAIM DEDUCTION UNDER CH. VI (A) i.e 80C, 80D, 80U ETC, FROM SUCH EXEMPT OR NIL INCOME UNLESS SUCH INCOME IS TAXABLE.
LIKEWISE NRI EARNING SALARY OUTSIDE INDIA i.e ACCRUED AND RECD OUTSIDE INDIA IS NOT TAXABLE IN INDIA. SO HE/SHE CANT CLAIM DEDUCTION UNDER CH. VI(A) AS THIS INCOME IS EXEMPT IN INDIA.
LIKEWISE NRI EARNING SALARY OUTSIDE INDIA i.e ACCRUED AND RECD OUTSIDE INDIA IS NOT TAXABLE IN INDIA. SO HE/SHE CANT CLAIM DEDUCTION UNDER CH. VI(A) AS THIS INCOME IS EXEMPT IN INDIA.
29 May 2018
IF AN ASSESSEE IS EARNING EXEMPT INCOME OR SAY NIL INCOME; THEN HE/SHE CANT CLAIM DEDUCTION UNDER CH. VI (A) i.e 80C, 80D, 80U ETC, FROM SUCH EXEMPT OR NIL INCOME UNLESS SUCH INCOME IS TAXABLE. LIKEWISE NRI EARNING SALARY OUTSIDE INDIA i.e ACCRUED AND RECD OUTSIDE INDIA IS NOT TAXABLE IN INDIA. SO HE/SHE CANT CLAIM DEDUCTION UNDER CH. VI(A) AS THIS INCOME IS EXEMPT IN INDIA.
03 August 2024
To address your queries on the tax implications for non-residents and the management of their accounts in India, here is a detailed breakdown:
### **1. Taxability of Income for NRIs**
**Income Earned Outside India:**
- **Non-Resident Status:** If a person is an NRI (Non-Resident Indian) in a given financial year (FY), their income earned outside India is generally not taxable in India. This means that if you earn a salary outside India and it is accrued and received outside India, it is not subject to tax in India.
**Remittance to India:**
- **Income Remitted to India:** Simply remitting money to India from abroad does not, by itself, make that income taxable in India. The taxability depends on whether the income was earned in India or from Indian sources.
**Key Points:**
- **Income Accrued and Received Outside India:** This type of income is not taxable in India, irrespective of whether or not it is remitted to India.
- **Income Accrued in India:** Income earned or accrued in India is taxable in India, even if it is received outside India.
**Example:**
- If you earn $50,000 as salary in the UAE and remit $20,000 of it to an Indian bank account, the $50,000 earned in the UAE is not taxable in India. The remittance does not affect the taxability.
### **2. Conversion of Bank Accounts**
**NRE vs. NRO Accounts:**
- **NRE Accounts:** Non-Resident External (NRE) accounts are meant for NRIs to deposit their foreign income. They are tax-free in India, and the funds in these accounts are repatriable.
- **NRO Accounts:** Non-Resident Ordinary (NRO) accounts are for managing income earned in India. They are subject to Indian taxes, and repatriation is subject to limits.
**Conversion:**
- **Existing Accounts:** Indian resident accounts can be converted into NRO accounts, but they cannot be converted into NRE accounts. For NRE accounts, a new account must be opened.
**Number of NRE Accounts:**
- **Multiple NRE Accounts:** You are allowed to have more than one NRE account. There is no restriction on the number of NRE accounts you can maintain.
### **3. Tax Deductions Under Chapter VI-A**
**Deductions on Exempt Income:**
- **Chapter VI-A Deductions:** Deductions under Chapter VI-A (such as 80C, 80D, 80U) are available against taxable income. If your income is exempt or below the taxable limit, you cannot claim these deductions because they are meant to reduce taxable income.
**NRI Salary and Deductions:**
- **Income Not Taxable in India:** If your salary is earned outside India and is not taxable in India, you cannot claim deductions related to that income because there is no taxable income on which to claim these deductions.
**Example:**
- If your total income is below the taxable threshold or if all your income is exempt, you cannot claim deductions under Section 80C or 80D since these deductions apply against taxable income only.
### **Summary:**
- **Taxability:** Non-residents are taxed in India only on income that is earned or accrued in India. Income earned and received outside India is not taxable in India.
- **Remittance to India:** Remitting money to India does not change the taxability of the income; it remains non-taxable if it was earned outside India.
- **Account Management:** You cannot convert existing accounts into NRE accounts but can open new NRE accounts. You can have multiple NRE accounts.
- **Deductions:** Deductions under Chapter VI-A can only be claimed against taxable income. If your income is exempt or non-taxable, you cannot claim these deductions.
Ensure you consult with a tax professional or financial advisor to tailor this advice to your specific circumstances and to stay compliant with both Indian tax laws and international regulations.
### **1. Taxability of Income for NRIs**
**Income Earned Outside India:**
- **Non-Resident Status:** If a person is an NRI (Non-Resident Indian) in a given financial year (FY), their income earned outside India is generally not taxable in India. This means that if you earn a salary outside India and it is accrued and received outside India, it is not subject to tax in India.
**Remittance to India:**
- **Income Remitted to India:** Simply remitting money to India from abroad does not, by itself, make that income taxable in India. The taxability depends on whether the income was earned in India or from Indian sources.
**Key Points:**
- **Income Accrued and Received Outside India:** This type of income is not taxable in India, irrespective of whether or not it is remitted to India.
- **Income Accrued in India:** Income earned or accrued in India is taxable in India, even if it is received outside India.
**Example:**
- If you earn $50,000 as salary in the UAE and remit $20,000 of it to an Indian bank account, the $50,000 earned in the UAE is not taxable in India. The remittance does not affect the taxability.
### **2. Conversion of Bank Accounts**
**NRE vs. NRO Accounts:**
- **NRE Accounts:** Non-Resident External (NRE) accounts are meant for NRIs to deposit their foreign income. They are tax-free in India, and the funds in these accounts are repatriable.
- **NRO Accounts:** Non-Resident Ordinary (NRO) accounts are for managing income earned in India. They are subject to Indian taxes, and repatriation is subject to limits.
**Conversion:**
- **Existing Accounts:** Indian resident accounts can be converted into NRO accounts, but they cannot be converted into NRE accounts. For NRE accounts, a new account must be opened.
**Number of NRE Accounts:**
- **Multiple NRE Accounts:** You are allowed to have more than one NRE account. There is no restriction on the number of NRE accounts you can maintain.
### **3. Tax Deductions Under Chapter VI-A**
**Deductions on Exempt Income:**
- **Chapter VI-A Deductions:** Deductions under Chapter VI-A (such as 80C, 80D, 80U) are available against taxable income. If your income is exempt or below the taxable limit, you cannot claim these deductions because they are meant to reduce taxable income.
**NRI Salary and Deductions:**
- **Income Not Taxable in India:** If your salary is earned outside India and is not taxable in India, you cannot claim deductions related to that income because there is no taxable income on which to claim these deductions.
**Example:**
- If your total income is below the taxable threshold or if all your income is exempt, you cannot claim deductions under Section 80C or 80D since these deductions apply against taxable income only.
### **Summary:**
- **Taxability:** Non-residents are taxed in India only on income that is earned or accrued in India. Income earned and received outside India is not taxable in India.
- **Remittance to India:** Remitting money to India does not change the taxability of the income; it remains non-taxable if it was earned outside India.
- **Account Management:** You cannot convert existing accounts into NRE accounts but can open new NRE accounts. You can have multiple NRE accounts.
- **Deductions:** Deductions under Chapter VI-A can only be claimed against taxable income. If your income is exempt or non-taxable, you cannot claim these deductions.
Ensure you consult with a tax professional or financial advisor to tailor this advice to your specific circumstances and to stay compliant with both Indian tax laws and international regulations.
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