NRI's: Incomes That Are Charged to Tax in India

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The Income-tax Law has its own set of provisions for determining the residential status of a person.

The residenstal status depends on a person earning income is very much relevant for determining the taxability of such income in his hands.

Hence, residential status plays a vital role in determining the taxability of the income.

NRI: Incomes That Are Charged to Tax in India

The following chart highlights the tax incidence in case of different persons:

Nature of income Residential status
  ROR (*) RNOR (*) NR (*)
Income which accrues or arises in India Taxed Taxed Taxed
Income which is deemed to accrue or arise in India Taxed Taxed Taxed
Income which is received in India Taxed Taxed Taxed
Income which is deemed to be received in India Taxed Taxed Taxed
Income accruing outside India from a business controlled from India or from a profession set up in India Taxed Taxed Not taxed
Income other than above (i.e.,income which has no relation with India) Taxed Not taxed Not taxed

* Where ROR stands for resident and ordinarily resident. RNOR means resident but not ordinarily resident. NR means non-resident.

Incomes are treated as incomes deemed to be received in India:

  • Interest credited to recognised provident fund account of an employee in excess of 9.5% per annum.
  •  Employer's contribution to recognised provident fund in excess of 12% of the salary of the employee.
  •  Transferred balance in case of reorganisation of unrecognised provident fund.

Source: IncomeTax Site

Read more about: non resident, taxation
Story first published: Tuesday, March 10, 2015, 9:30 [IST]
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