Saturday, January 26, 2008

Income Tax for NRIs

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Liability to pay tax in India does not depend on the nationality or domicile of the Tax payer but on his residential status.

Residential Status is determined on the basis of physical presence i.e. the number of days of stay in India in any year.

(a) An individual is resident if any of the following conditions are satisfied:
he stayed in India for 182 days or more during the previous year, or
he stayed in India for 365 days or more during the four preceding years and stays in India for atleast 60 days 9 182 days in case of an Indian citizen or a person of Indian Origin coming on a visit to India or 182 days in case of an Indian citizen going abroad for an employment ) during the previous year. Stay in India for the above criteria may be continuous or intermittent.

(b) Hindu Undivided Family (HUF) or firm or other Association of persons is resident of India except in cases where the control and management of its affairs is wholly situated outside India in the previous year

(c) A company is resident in India if-
i. it is an Indian company, or
ii. during the previous year, the control and management is situated wholly in India.
iii. A person resident in India, in a previous year in respect of any source of income shall be deemed to be resident in India in respect of his other sources of income.
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