I got a job in US. How my residential status will be determined

My son was working in Bangalore and was being taxed as resident. Then he went for additional research in US (Aug, 2019 to June, 2021) after which he obtained a job there in Aug, 2021. Throughout this era, his keep in India was as under-

1) 136 days throughout monetary 12 months 2019-20

2) 36 days in monetary 12 months 2020-21

3) 37 days in monetary 12 months 2021-22.

Request to your recommendation on following points- 

A) In monetary 12 months 20-21, he had earnings of about 2 lakhs from financial institution curiosity and capital good points on shares in India. No international earnings. What can be his residential status- resident or non-resident? And which ITR kind is to be filed.

B) In monetary 12 months 21-22, his earnings is from wage in US (Rs. 50 lakhs, which is being taxed in US), capital good points on shares in US ( 25000), curiosity and capital good points on shares in India (Rs. 4 to five lakhs). He has invested Rs. 1.50 lakhs in PPF. How will he be assessed in India- as resident or non-resident. And whether or not solely his Indian earnings (curiosity and capital good points) can be taxed or wage earnings additionally.

Revenue of an individual in a selected nation turns into answerable for taxation on the idea of his residential standing decided on the idea of his bodily keep within the nation or on the idea of supply of the earnings. In case of a resident of a rustic, his world earnings is taxed in India. Any earnings which has arisen in India is taxed within the fingers of an individual regardless of his residential standing below the earnings tax legal guidelines.

For figuring out whether or not an individual is resident or not, there are two fundamental standards. If one satisfies anybody standards, he’s handled as resident of India. Beneath the primary standards one turns into resident of India if he has been India for 182 days or extra. Since your son was not bodily current in India throughout each these years so he doesn’t fulfill the primary situation. Beneath the second situation an individual can nonetheless be a resident of India if he has been in India for twelve months or extra through the 4 years previous to that 12 months and was bodily current in India for 60 days or extra days through the related earlier 12 months. Since your son was not bodily current in monetary 12 months 20-21 and isn’t prone to be current in India for greater than 60 days through the monetary 12 months 2021-22 he is not going to grow to be a resident of India even when his mixture keep in India was greater than twelve months throughout 4 years previous each these years. Since he can be a non-resident for monetary 12 months 2021-2022, he should pay tax solely in respect of his Indian earnings. 

So for the monetary 12 months 2020-21 he has to make use of ITR 3 if he needs to file his ITR although he’s not required to file one since his earnings is beneath the taxable restrict of Rs. 2.50 lakhs. For the monetary 12 months which kind to make use of will rely on the ITR types notified by the federal government which is mostly carried out throughout April of the following 12 months. 

Balwant Jain is a tax and funding skilled and may be reached on jainbalwant@gmail.com and @jainbalwant on Twitter.


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