What is my tax status ? please advice !!
This query is : Resolved
12 November 2017
Would some honorable member explain to me my tax status as per the the information given below. I was working outside the country since the last 15 years. I spent in excess of 185 days outside the country in every financial year since 2004, thus qualifying me as a non resident for every year all the way upto March 2016.
After 15 years of service I lost my job, on my return to India for leave, so return to India date is in the month of March (18th March 2016). With whatever little understanding I have about laws governing taxation from this useful forum, I understand that I am a RNOR for the financial year 2016-2017, since I am an NRI for 9 out of 10 years preceeding my return to India.
However, could somebody please shed light on what my status would be for the FY (2017-2018). Will I be classified as resident and be liable to pay taxes starting for FY 2017-2018 or will I come under the ambit of tax only from FY 2018-2019. For how many years can I draw the benefit of being RNOR ? after my return to India.
I sat down and jotted all the entry and exit dates on my passport and have broadly got an outline of the number of days that I spent in India for the last 11 years, whilst travelling up and down for work abroad.
I had a hard time looking at dates prior to 2004 since passport is quite old now. But here are the details that I have collected so far :
FY 2005 to 2006 = 150 days
FY 2006 to 2007 = 145 days
FY 2007 to 2008 = 167 days
FY 2008 to 2009 = 162 days
FY 2009 to 2010 = 172 days
FY 2010 to 2011 = 151 days
FY 2011 to 2012 = 169 days
FY 2012 to 2013 = 161 days
FY 2013 to 2014 = 174 days
FY 2014 to 2015 = 161 days
FY 2015 to 2016 = 171 days (Lost job in March 2016)
FY 2016 to 2017 = 365 days
FY 2017 to 2018 = 210 days (to date - not working).
As per this information, would you be able to guide me as to how long can I draw the benefit of being RNOR.
What will my status be for the FY (2017-2018). Will I be classified as resident and be liable to pay taxes starting for FY 2017-2018 ?
OR will I come under the ambit of tax only from FY 2018-2019 ?
I am not sure if I have even framed my question correctly, but what should the right time to file ITR's.
Please do advice as to the right way forward. Appreciate your advice.
Several tax websites like cleartax and hrblock are ambiguous about how long the RNOR status is available for the returning NRI, some say max upto 3 years, some say 2 years, depending on date of return. Any senior member who has been in a similar situation here who can shed more light I will be very grateful.
After 15 years of service I lost my job, on my return to India for leave, so return to India date is in the month of March (18th March 2016). With whatever little understanding I have about laws governing taxation from this useful forum, I understand that I am a RNOR for the financial year 2016-2017, since I am an NRI for 9 out of 10 years preceeding my return to India.
However, could somebody please shed light on what my status would be for the FY (2017-2018). Will I be classified as resident and be liable to pay taxes starting for FY 2017-2018 or will I come under the ambit of tax only from FY 2018-2019. For how many years can I draw the benefit of being RNOR ? after my return to India.
I sat down and jotted all the entry and exit dates on my passport and have broadly got an outline of the number of days that I spent in India for the last 11 years, whilst travelling up and down for work abroad.
I had a hard time looking at dates prior to 2004 since passport is quite old now. But here are the details that I have collected so far :
FY 2005 to 2006 = 150 days
FY 2006 to 2007 = 145 days
FY 2007 to 2008 = 167 days
FY 2008 to 2009 = 162 days
FY 2009 to 2010 = 172 days
FY 2010 to 2011 = 151 days
FY 2011 to 2012 = 169 days
FY 2012 to 2013 = 161 days
FY 2013 to 2014 = 174 days
FY 2014 to 2015 = 161 days
FY 2015 to 2016 = 171 days (Lost job in March 2016)
FY 2016 to 2017 = 365 days
FY 2017 to 2018 = 210 days (to date - not working).
As per this information, would you be able to guide me as to how long can I draw the benefit of being RNOR.
What will my status be for the FY (2017-2018). Will I be classified as resident and be liable to pay taxes starting for FY 2017-2018 ?
OR will I come under the ambit of tax only from FY 2018-2019 ?
I am not sure if I have even framed my question correctly, but what should the right time to file ITR's.
Please do advice as to the right way forward. Appreciate your advice.
Several tax websites like cleartax and hrblock are ambiguous about how long the RNOR status is available for the returning NRI, some say max upto 3 years, some say 2 years, depending on date of return. Any senior member who has been in a similar situation here who can shed more light I will be very grateful.
13 November 2017
do you have any income from abroad. This is important for the taxability of the same in india.
Message likes :
1 times
13 November 2017
Yes Sir, I do. I get dividend for company issues shares when I was working. I did get it in 2016, but I have already paid tax on this (deducted at source at 25%), since the company is based out of the US.
14 November 2017
you say company is based out of US.......is it located in India OR any other country?
14 November 2017
Company is a global MNC, which is paying dividend on the shares issued to me when I was an employee (ESOP), but they hired me in Singapore and I always worked outside India.
14 November 2017
Let me try to explain......
There are 2 main categories of residential status. 01. Resident and 02. Non resident
So to say, as per the basic conditions, your status for the financial years 2016-17 and 2017-18 is RESIDENT......now next?
Next what we have to decide is whether or not you are "not ordinarily resident" OR "ordinarily resident".... ok?
For that you need to read section 6(6) which says that a person can be "not ordinarily resident" if
either he has been Non Resident in 9 out of 10 previous years
OR
he has been in India for a period of less than 730 days during 7 previous years..........ok?
Now for 2016-17, .....you were 1159 days in India for 7 previous years (172+151+169+161+174+161+171)
and for 2017-18...... you were 1352 days in India 151+169+161+174+161+171+365)
Now let me discuss the CONFUSION most of the people commit while reading this section 6(6)..... 9 out of 10 AND 730 days in 7 years....these conditions are "OR type" of conditions....
so to say even if you satisfy any one of the 2 conditions of section 6(6), you will be regarded to "not ordinarily resident"
Since you are satisfying the condition of NR for 9 out 10 years for both these years i.e. 2016-17 and 2017-18, your status is Resident but not ordinarily resident.
So for these 2 years, dividend received outside India is NOT taxable in India.
There are 2 main categories of residential status. 01. Resident and 02. Non resident
So to say, as per the basic conditions, your status for the financial years 2016-17 and 2017-18 is RESIDENT......now next?
Next what we have to decide is whether or not you are "not ordinarily resident" OR "ordinarily resident".... ok?
For that you need to read section 6(6) which says that a person can be "not ordinarily resident" if
either he has been Non Resident in 9 out of 10 previous years
OR
he has been in India for a period of less than 730 days during 7 previous years..........ok?
Now for 2016-17, .....you were 1159 days in India for 7 previous years (172+151+169+161+174+161+171)
and for 2017-18...... you were 1352 days in India 151+169+161+174+161+171+365)
Now let me discuss the CONFUSION most of the people commit while reading this section 6(6)..... 9 out of 10 AND 730 days in 7 years....these conditions are "OR type" of conditions....
so to say even if you satisfy any one of the 2 conditions of section 6(6), you will be regarded to "not ordinarily resident"
Since you are satisfying the condition of NR for 9 out 10 years for both these years i.e. 2016-17 and 2017-18, your status is Resident but not ordinarily resident.
So for these 2 years, dividend received outside India is NOT taxable in India.
14 November 2017
Dear Amol Sir, thank you very much for helping me with my query. I sincerely appreciate all help, from your good offices. Hopefully, I will forward your reply to my CA. Thanks again.
15 November 2017
Sure. You are most welcome...
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST Refund SB005 Error
- Notice u/s.148- Asstt.Year 2015-2016
- Invoice Numbers WROGLY ENTERED
- TDS on purchase of value vouchers for employees ?
- PAYMENT TO OPEN AI AND ENVATO ELEMENT
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
