Nri taxation

During this year, you will have to first check whether you qualify as a ROR or RNOR:

If you qualify as RNOR:

Rent in India from shop INR 150000 will be taxable. Overseas salary income and NRE FD interest will not be taxable.

If there is no other income, then there is no taxability or return filing requirement in India.

If you qualify as ROR:

Overseas salary income of INR 12 lacs will be taxable. Rent in India from shop INR 150000 will be taxable.  NRE FD interest will not be taxable.

You will have to file a tax return and pay appropriate tax. You will also have to fill Schedule FSI and FA regarding foreign income and assets. DTAA will not be of any use as no tax is deducted in UAE. Concessional rate of 12.5% is applicable on NRO FD which is not applicable in your case.

Disclose NRE FD interest as exempt income in tax return.

Your understanding on NRE FD is right. As long as your residential stay as per FEMA is “person resident out of India”, interest on NRE FD is not taxable to you, irrespective of your residential status.

Dear Sir,  

Thanks for your reply and kind suggestion. 

By taking various views from other experts too I came to a calculation that in case if I m NRI as per Fema but not NRI as per IT Act than my taxability will be as under :-

*Subject if I dont fall in RNOR category

A)Income from India shop is taxable.

B)NRI FD interest is not taxable under 10(4)ii of income tax act being my status of 'person resident outside' under FEMA.

C) Though Salary in overseas should be taxable but due to DTAA 15(1) between India/Uae it will not be taxed, as It will only be taxed If my employer appoint me to work here in India and I stay here more than 183 days due to employment but if not staying here for work than contracting state (UAE)has right to tax only but India cant tax.

*Artcle 15(2)a of DTAA will only be applied if I am working for my overseas employer here in India staying more than 183 days and getting  salary outside of India.

Plz check this article

https://www.cagds.in/articles___presentations/articles/foreign_salary___taxability_from_resident_s_perspective_

Please give me your final conclusion and should I file return or no need as I only have taxable income of shop rent and which is less than Rs250,00

Awating you advise.

Regards

Prakash

I take your point however application of DTAA between India and UAE is a grey area - no "double taxation" arises as there is no personal income tax in UAE. 

If you rely on DTAA and do not offer UAE income to Indian taxation after becoming ROR, you need to be prepared for litigation. You have to also take into account cost of defending your case before income tax authorities vis a vis the tax saving. 

On a conservative note, I would prefer offering the income to tax in India however there can be varying viewpoints on this issue. Note that if you hold even any foreign asset ( even a UAE bank account) or any foreign income AND your status is ROR, there is no exemption from filing the income tax return. You have to file the tax return in India to comply with Black Money Act.

Dear sir

Well noted and I fully understand that DTAA may not be applied, if there is no personal income tax in UAE but still I am liable to tax in UAE, wheter UAE goverment demands or not its their own will and for this point, I can fight with Income Tax dept, if they raise this issue.

But please help me for 3 below mentioned points :-

A) If INDIA/UAE DTAA applies in my case and if Article 15(2)b condition is not satisfied than will India have right to tax on my Salary Income in UAE ?...  

B) Further INDIA/UAE treaty Article 25, will Tax Credit base be applied or Exemption method be applied for salary income?

C) If my salary in UAE is less than Inr250,000/yearly and I don't have any other income in India, do I still have to file tax        return for just holding a foreigh bank account ?

Hope to hear you soon.

Regards

Prakash Chandnani