My stay in India from 60 days to 182 days

My stay in India from 60 days to 182 days

I am a Indian writer and publishing my book.

An Indian is considered tax resident if he stays:
1. 182 days or more in a fiscal year.
2. More than 60 days in current year. That can be extended to 182 days in certain cases.
3. Question: Under what circumstances?

I have been living in India. If I leave India on 1st April 2017, and don’t stay in India for more than 60 days from thereon, am I exempt from Indian taxes for 2018. How can I extend the eligibility to 182 days of stay in India and still be tax exempt in India.

Asked 8 years ago in Income Tax

Hi,

My answer is based upon the assumption that you are a resident in India till FY 2016-17 and that you want to claim non-resident status for FY 2017-18.

First scenario mentioned by you, i.e leaving India on 1-Apr-2017 and not staying for more than 60 days, you will definitely be a Non-Resident for FY 2017-18 (Note: Both the Date of departure from Indian and arrival to India will be treated as a day of stay in India)

If you leave India for the purpose of employment outside India, then the period of stay to consider you as a resident will be 182 days instead of 60 days.

Note: If you are already a non-resident, but comes to India on a visit, then 182 days is the period of stay required to consider as a resident.

Pradeep Bhat

CA, Bengaluru

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Just a small clarification on the issue. Thank you for the answer, right on target.

I can go for 7 months Europe trip every year on Business Visa for a company situated in Qatar. I would be appointed Business Development Manager. They have an Indian office here.

So, in that case, all my income from my book would be of no concern to Indian taxes. Right?

Asked 8 years ago

Hi,

If you go to Europe on Business visa for 7 months, you will certainly be a Non-resident.

However, since the Qatar Company has a Permanent Establishment in India and you receive salary from the same, then the salary may be deemed to be accrued or arising in India. Only the salary earned from the Qatar Company's Indian subsidiary is liable for Tax in India.

However, in such a case, if you become a Resident of a particular country in Europe, you can claim Double Taxation relief subject to DTAA between India and that Country

Pradeep Bhat

CA, Bengaluru

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Talk to Pradeep Bhat

In that case, I can create an offshore company and launch my book and products through that company. I didn't do it because I have read that POEM (Place of Effective Management i guess ) of a company is in India, then the company is tax resident in India.

Now, I already am going on a Business Visa to Europe and will be there for 7 months a year. If I launch a offshore company in Bahamas and stay out of India for 7 months, does the POEM be in India. For POEM of the company to be out of India, if I am the only person in the company, for how long I should stay out of India.

I can create different departments and place them out of India later, but for now I am a one Man show.

Asked 8 years ago

Yes POEM if established in India then it is taxable in India.

Shyam Sunder Modani

CA, Hyderabad

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Hi,

If POEM is in India, then the income will be taxable in India. If POEM is outside India, then the Income will not be taxable in India if you are a non-resident

Pradeep Bhat

CA, Bengaluru

542 Answers

94 Consultations

Talk to Pradeep Bhat

Hello Sir,

Considering the facts provided by you, it appears that you want to take the benefit of Non - Residency and save taxes in India.

To sum up your query if your POEM is in India then Tax will be charged in India. Secondly, the steps you are planning to adopt of making offshore companies does not sound viable to me unless the amount runs into Crores and you will save at least a Crore in taxes. Because, if your case is selected for scrutiny the cost to fight your case out is gonna be high and you should also consider the means as to how will you route the money back to India so that it is not taxed even then.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP