• NRE to resident status

I have returned to India from Kuwait for good on Feb 24th 2017. 

One of the banks I have FDs with as NRI, says, if I attempt to change status to resident in their bank a/c, they will have to liquidate FD (before status change) leading to loss of interest for year. 

Can I hold the FD till end of July 2017 (1 year maturity will be done) without changing status to resident and then pay tax on it in next year filings? Can I be a NRI in system for 180 days from landing without changing my status with bank. 

I am salaried and my salary account is resident. Only one bank is creating this issue
Asked 4 years ago in Income Tax

Hi,

As per FEMA regulations, a person residing in India for more than 182 days during the course of the preceding financial year will be treated a resident in India.

Since, you have not completed 182 days in FY 2017-18, you are not a resident in India for FY 2017-18.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

You will be resident in India if your stay will be 182 days or more in previous year.

OR

60 days in PY and 365 days in four PY preceding PY.

In 2017-18 you are NRI so no issue.

In 2018-19 you will become resident on 29.09.2018 which is after july.

Thanks

Vivek Kumar Arora
CA, Delhi
4493 Answers
621 Consultations

5.0 on 5.0

Residential status is calculated for each previous year. In your case it will be calculated from April 2018 as you are already NRI in 2017-18. You can retain the status NRI in FD till July 2018 and change it afterwards and pay tax on whole while filling ITR for the same.

Vivek Kumar Arora
CA, Delhi
4493 Answers
621 Consultations

5.0 on 5.0

Yes, you can be an NRI in Banks books till July 2018.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

There are two financial years involved after returning to India. One is F.Y. 2017-18 in which you landed i.e.24.02.2018 so for fy 17-18 your stay in India will be calculated from 24.02 to 31.03.18

Another is fy 18-19 for which your stay in India will start from 01.04.2018.

Thanks

Vivek Kumar Arora
CA, Delhi
4493 Answers
621 Consultations

5.0 on 5.0

Hi,

There should not be any issue for you to keep the status as NRI till July 2018 in the bank books.

Regards,

Nikhil.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Your status for Financial Year 2017-18 should presumably be NRI as you landed back on Feb 18 only.

Further, for FY 2018-19, the same shall be calculated only upon completion of FY 2018-19 i.e. 31.03.2019. Hence, your status in Bank should remain as NRI till 31.03.2019, because as per FEMA as well as IT Act, residential status is calculated only upon completion of year only.

Regards,

Sunny Thakral
CA, Delhi
224 Answers
8 Consultations

5.0 on 5.0

Hi

According to IT provisions of residential status, you will be classified as NRI only after Sep 18. So, you may very well keep the NRI status jn the bank till July 18. There is no issue.

Lakshita Bhandari
CA, Mumbai
5660 Answers
817 Consultations

5.0 on 5.0

HI

Yeah you may continue to be NRI in the books till July, 2018. This can be justified very easily before tax authorities in case of any future queries too. You may tell them that you were not sure whether you will be staying in India or moving back to Kuwait on some new assignment. As such, your residential status continued to be NRI for this period.

Moreover, you landed in Feb 2018 and considering that, till July 2018 yo do no complete 180 days in India during this FY which will not turn your residential status to resident.

As such you may go ahead.

Thanks

Damini

Damini Agarwal
CA, Bangalore
389 Answers
31 Consultations

5.0 on 5.0

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