Hi, I left India for employment in Singapore on 26th April, 2019. In 2019-20, I was in India only for 52 days and so qualified as an NRI for that year. Now this year, on 8th Nov, 2020, I've permanently returned to India and am employed here. I made no visits to India in the period between 1st April, 2020 and 8th Nov 2020. Questions regarding year 2020-21: Q. What is my residency status? Q. Will my Singapore income be taxed in India? Q. In my case does DTAA help with only getting tax credit? Or will it make my Singapore income non-taxable? Some clarification regarding IT Act section 6, (1), Explanation 1, (a): "....being a citizen of India, who leaves India in any previous year...purposes of employment outside India" Q. What is the definition of previous year? Q. Since I left for employment in year 2019, does this rule count for year 2020 as well?
Hi
You will be a resident for FY 20-21. Your global income would be taxable in India. You will be eligible to claim foreign tax credit for taxes paid in Singapore.
Previous year means that FY means 19-20. This clause won't be applicable for FY 20-21.
1. Resident and Ordinary Resident. Global income will be taxable in F.Y. 2020-21.
2. Yes
3. Only getting foreign tax credit
4. Previous year means financial year starting from 01.04.20XX to 31.03.20XX.
5. No
For detailed discussion, please contact telephonically.
How many days should I further stay outside India in order to qualify as an NRI for 2020-21? Let's say I temporarily remote work from somewhere?
- You should be in India for less than 60 days in F.Y. 2020-21 to qualify for NRI.
A taxpayer would qualify as a resident of India if he satisfies one of the following 2 conditions :
1. Stay in India for a year is 182 days or more or
2. Stay in India for the immediately 4 preceding years is 365 days or more and 60 days or more in the relevant financial year
Check for second condition. So, if your stay in India is less than 60 days in a year, you would be classified as a non-resident.
Hi
1. Ordinary Resident
2. Yes in case of ordinary Resident global income will be taxable.
3. You will get credit of tax paid in singapore. It will be taxable in india.
As per the Income Tax law the income earned in current year is taxable in the next year. The year in which income is earned is known as the previous year. In layman language the current financial year is known as the previous year. The financial year starts from 1st April and end on 31st March of the next year.
Hi
A taxpayer would qualify as a resident of India if he satisfies one of the following 2 conditions :
1. Stay in India for a year is 182 days or more or
2. Stay in India for the immediately 4 preceding years is 365 days or more and 60 days or more in the relevant financial year
In the event an individual who is a citizen of India or person of Indian origin leaves India for employment during an FY, he will qualify as a resident of India only if he stays in India for 182 days or more. Such individuals are allowed a longer time greater than 60 days and less than 182 days to stay in India. However, from the financial year 2020-21, the period is reduced to 120 days or more for such an individual whose total income (other than foreign sources) exceeds Rs 15 lakh.
In another significant amendment from FY 2020-21, an individual who is a citizen of India who is not liable to tax in any other country will be deemed to be a resident in India. The condition for deemed residential status applies only if the total income (other than foreign sources) exceeds Rs 15 lakh and nil tax liability in other countries or territories by reason of his domicile or residence or any other criteria of similar nature.
A1. You are a Resident in India.
A2. Ideally, yes.
A3. DTAA provides incomes generally non-taxable. Subject to more research required.
The previous year is the Financial year. In the current case 2020-21.
Every year is required to be assessed separately for residency status.
From the information available above you would be considered as ordinary resident.
Yes your singapore salary would be taxed in India subject to DTAA between india and singapore.
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Thank you.
