Dear sir, I am an NRI, working in Qatar since January 2012. My company has decided to close operations due to business situation and I have been issued a notice. My last working day is Sept 30 2020 and I can come back to India in 1st week of October. I understand if I come back in 1st week of October I will be exempt from Income tax ( in all the previous years I have stayed in India on vacation for max 1 month only). However due to my daughter's education concerns ( she is student in class XII) I plan to return early. In that situation Kindly guide me on tax liability. 1) What will be the basis of tax calculation for my salary earned in Qatar. Is it on total salary including HRA or on basic salary only? Is there any exemption on money spent on House rent, school fee etc for NRI? 2) I will get end of service gratuity equivalent to 4 months basic salary? How will be the tax calculated on that? 2) If I come back in September but again go back in this FY on visit visa/ business visa and spend time in Qatar ( to make up for 182 days) will I be exempt from income tax? 3) I hold an NRE account in India and the interest is tax free so far. How long can I keep this as an NRE account? 4) How long the interest earnings from this account be tax free for me.
1) If you come before 1st Oct, you will be considered as resident. total salary will be taken for tax calculation in India. House rent, school fees etc can be claimed if payment is made in India not otherwise.
2)If your period of stay is less than 182 days, foreign income will not be taxed in India.
3) You can keep NRE account for upto 3 years.
4)Interest is tax free, till you are non resident.
If in current year you come to India and stay for more than 182 days you will not become a resident. To check whether your Qatar income would be taxable in India or not I need to know whether before 2012 January to April 2010 you were in India for whole time i.e. you were resident in India and you never stayed in India in previous years for more than 1 month?
If yes then your qatar income wont be taxable in India.
You will get it in Qatar so not taxable in India.
Yes for sure.
You can keep it for 2 year prima facie till the time you become ordinary resident.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
1. Yes, you will get deduction of HRA.
2. Yes you will be eligible for gratuity exemption subject to the limits mentioned in that section (maximum Rs 10 lakh or 15 days of salary for each completed year of service – whichever is lower)
3. If you go back to Qatar on a business visa and does not spend 182 days in India then you will be an NRI and you are not liable to pay tax.
4.You can keep it as NRE if you are a non resident as per FEMA. That means if you are not in India for 182 days in the preceding financial year and your intention is to go out of India again.
5. As long as you are an NRI as per FEMA.
As asked by Naman the status is as below. I worked in South Korea from Oct 2005 to 8 Dec 2008. I worked in India from Feb 2009 till Jan 2012 and Joined my job in Qatar in January 2012 . Can you please check my tax liabilities with added information.
You didn't confirm whether you were in India just for 1 month in past so many years when you were in Qatar?
If thats correct then you would be liable to be taxed only for your Indian income and not the income earned in Qatar during FY 2020-21 even if you come back in September.
If you want to discuss further we can have a phone consultation.
- Please try to come after 02.10.2020. In that case, your residential status in India will NRI for F.Y. 2020-21 even if you stay till 31.03.2021 in India.In that case, your indian income will be taxable in India and not global income.
1) In case of NRI, only indian income is taxable.
2) You have to ensure that your stay in india should not be for 182 days.
3) Till you are NRI
4) Till you are NRI
Hi
If your stay in India less than 182 days in current year then you resident status will be NRI . In case of NRI only income earned is India is taxable in india.
1.Yes Deduction of HRA is allowed.
2.Yes. You will get Exemption for gratuity.
3. Till your status is NRI as per FEMA.
4. Till your status is NRI as per FEMA.
Dear Sir,
Hope you are doing well !!
In India, residential status is dependent on the number of days you spent in India.
If you have spent less than 182 days in FY 2020-21 , you are non-resident. In such a case, only your Indian sourced income is taxable in India.
1. Yes, you will get HRA exemption.
2.Yes, you will be eligible for exemption for the same.
3.Till you are NRI.
4. Till you are NRI.
In addition to above, if you classify as a resident for FY 20-21, you still have a chance that you would not be liable to pay taxes on salary earned and received in Kuwait, i.e. if you classify as a Not Ordinary Resident. The first condition of 9 out of 10 years won't satisfy in your case. Check for fulfilling the second condition of stay of 729 days or less in previous 7 FYs ( FY 13-14 to FY 19-20). In case the condition is satisfied, you will be a RNOR and thus, only income earned or deemed to accrue or arise in India shall be taxable in India.
Hello,
Rightly mentioned by you, regarding the residential status that if your come after 2 Oct. 2020, your residential status would be NRI for the F.Y. In such case, only your Indian income would be taxable in India.
1. Considering you come earlier than the date mentioned, you would be considered a resident for the income tax purpose and your income earned Qatar would be taxable in India. HRA exemption would be available.
2. You will get Exemption for gratuity.
3. Till you are Non-resident.
4. Till you are Non-resident.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
In case you qualify as RNOR individual, by fulfilling any of the below two conditions, the foreign income (i.e., income earned in Qatar) shall not be taxable in India.
(i) has been a non-resident in India in 9 out of 10 previous financial years preceding that year, or
(ii) has during the 7 previous years preceding that year been in India for a period of, or periods amounting in all to, 729 days or less.
Your status can be RNOR.
In that case your global income will not be taxable.
If an individual qualifies as a resident, the next step is to determine if he/she is a Resident ordinarily resident (ROR) or an RNOR. He will be a ROR if he meets both of the following conditions:
1. Has been a resident of India in at least 2 out of 10 years immediately previous years and
2. Has stayed in India for at least 730 days in 7 immediately preceding years
Therefore, if any individual fails to satisfy even one of the above conditions, he would be an RNOR.
From FY 2020-21, a citizen of India or a person of Indian origin who leaves India for employment outside India during the year will be a resident and ordinarily resident if he stays in India for an aggregate period of 182 days or more. However, this condition will apply only if his total income (other than foreign sources) exceeds Rs 15 lakh.
Also, a citizen of India who is deemed to be a resident in India (w.e.f FY 2020-21) will be a resident and ordinarily resident in India.
NOTE: Income from foreign sources means income which accrues or arises outside India (except income derived from a business controlled in India or profession set up in India).