rajkumar goyal (manager) (67 Points)
17 June 2015what will be the tax treatment if a indian have income & property in nepal or bhutan ?
is it will be treated as foreign assets ?
Anchal moonat
(CA)
(48 Points)
Replied 18 June 2015
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 18 June 2015
Hi Rajkumar,
Even though you are an Indian, you need to check your residential status of the every year to determine the taxability of global income. If you are resident and ordinary resident, your global income would be taxed in India. Therefore, your income from property held in nepal and bhutan would be taxed in India.
Any asset held outside India would be deemed to be foreign asset for Income tax.
Hope this solves your query
Thanks and Regards,
Manoj B. Gavali
rajkumar goyal
(manager)
(67 Points)
Replied 18 June 2015
thank you for comments, but sir there is no need to visa or passport for nepal / bhutan ,so what will be the basis/ proof of resi. status as NRI ,so that this income can be treat as exempt one.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 18 June 2015
Good Question Rajkumar,
If you are claiming status to be as non resident because of your residence in nepal/Bhutan, you must have the valid proof to substantiate your claim. There was one case law passed in favour of revenue which exactly matches with details you mentioned. It was held that
"Only because there is open border between India and Nepal and as Passport is not required to travel to and from between India and Nepal, it cannot be presumed that anyone who claims to be Indian national residing in Nepal, is a non-resident Indian. Simply because it is difficult to prove in such a case whether a person was residing for a particular period in Nepal or in India, it does not mean that the claim of a person who claims to be residing in Nepal that he is a non-resident Indian, has to be accepted by the authorities."
So even if resident claimed as non residence just because his stay in Nepal, Income Tax department has the authority to go into the details as its a pure question of facts and not the question of law.
So if you want to get inside the umbrella of Non resident, you better should have the valid proofs for substantiation. Better you can carry passport and get it stamped for the date or hotel bills for stay in Nepal or some other valid proof to substantiate your stay in Nepal/bhutan.
Enclosed herewith High Court of Rajasthan, Jaipur bench citation for your reference.
Thanks and Regards,
Manoj B. Gavali
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 18 June 2015
Attached is the citation
CAclubindia
