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External income of RNORs is not taxable


I’m a returning NRI and my standing might be transformed to resident and ordinarily resident in India. I maintain some shares within the US market that aren’t topic to any tax as they have been purchased within the UAE. I’m undecided if I might be eligible to LTCG tax on these shares as soon as I’m again in India. If that’s going to be the case, I would favor to liquidate these shares and convey the capital with me as soon as I come again . Please let me know if property acquired outdoors of India from non-Indian revenue might be eligible for taxation as soon as I change into an unusual citizen of India.

—Identify withheld on request

 

To search out out whether or not your revenue shall be taxed in India, you might want to set up your residential standing as per the Earnings Tax Act of India for the related monetary yr. You’ll be able to check your residential standing within the following method.

Circumstances: a) you might be in India for 182 days or extra within the monetary yr (FY); or b) you might be in India for 60 days or extra within the FY and twelve months or extra within the 4 FYs instantly previous the related FY. Extra situations: You might be resident in India in two of the ten FYs instantly previous the related FY; and you might be in India within the seven years instantly previous the related FY for 729 days or extra. Should you meet any of the primary set of situations and each the extra situations, you shall be thought of a resident in India. Should you meet any of the primary situations, however don’t meet the extra situations, you shall be thought of a resident however not ordinarily resident (RNOR) in India.

If you don’t meet any of the primary situations, you shall be a non-resident in India.

Instantly after returning, your residential standing is prone to be that of a non-resident and RNOR for someday. For a non-resident and RNOR, solely the revenue that’s earned or acquired in India shall be taxable in India.

When you change into a resident of India, all of your international revenue shall be taxable.

Archit Gupta is founder and CEO of ClearTax.

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