How is tax calculated for income earned by non-resident Indians?

I’m a mechanical engineer dwelling in Doha (Qatar) for the ultimate 4 years. Is my income earned abroad taxable and, if that is the case, how must I pay taxes? —Name withheld on request

Taxability of income in India relies upon upon the residential standing in India, the provision of income, and the place of receipt of income. The residential standing is ready based mostly totally on an individual’s bodily presence in India all through a fiscal yr (FY), along with work days and non-work days, and the earlier 10 FYs. For Indian residents, even after they do not grow to be residents based mostly totally on bodily presence in India, they will nonetheless grow to be resident nevertheless not ordinarily residents based mostly totally on the absence of obligation to pay tax in one other nation or territory by motive of domicile or residence or one other requirements of a similar nature, if India sourced income exceeds ₹15 lakh. Residential standing is dynamic and needs current dedication for each FY.

An explicit particular person qualifying as resident and ordinarily resident (ROR) is taxable on his worldwide income in India and is required to report all worldwide property inside the India income tax return. Also, the income earned from such worldwide property all through the associated FY along with nature of income and head of income beneath which such income has been provided to tax inside the India income tax return should be reported in relation to each worldwide asset.

An explicit particular person qualifying as non resident (NR) or resident nevertheless not ordinarily resident (RNOR) is taxable on the following: income accruing or arising in India;. income deemed to accrue or come up in India; income obtained or deemed to be obtained in India; cncome accruing or arising outside India if the income is derived from enterprise managed in or profession setup in India (for RNOR).

As you’ve got been outside India for earlier 4 years, it is potential that you possibly can be qualify as non-resident of India, assuming your India sourced income is decrease than ₹1,500,000. As a non resident, wage earned for employment exercised outside India and obtained outside India will not be going to be taxable in India. If wage income for employment exercised outside India is immediately obtained in India, it’s going to possible be taxable inside the nation.

Your non-public income in India similar to curiosity income from banks, dividend income from shares, mutual funds, and so forth, rental income from residence property in India might be taxable in India. You may need to deposit income tax via advance tax in 4 instalments (15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March) or sooner than submitting of a tax return via self-assessment tax along with curiosity by 31 July.

Sonu Iyer is tax companion and people advisory corporations chief, EY India.

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