Income tax: I bought a job in US. How my residential standing can be decided

My son was working in Bangalore and was being taxed as resident. Then he went for additional research in US (Aug, 2019 to June, 2021) after which he bought a job there in Aug, 2021. During this era, his keep in India was as under-

1) 136 days throughout monetary yr 2019-20

2) 36 days in monetary yr 2020-21

3) 37 days in monetary yr 2021-22.

Request to your recommendation on following points- 

A) In monetary yr 20-21, he had revenue of about 2 lakhs from financial institution curiosity and capital features on shares in India. No overseas revenue. What can be his residential status- resident or non-resident? And which ITR type is to be filed.

B) In monetary yr 21-22, his revenue is from wage in US (Rs. 50 lakhs, which is being taxed in US), capital features on shares in US ( ₹25000), curiosity and capital features on shares in India (Rs. 4 to five lakhs). He has invested Rs. 1.50 lakhs in PPF. How will he be assessed in India- as resident or non-resident. And whether or not solely his Indian revenue (curiosity and capital features) can be taxed or wage revenue additionally.

Income of an individual in a selected nation turns into chargeable for taxation on the premise of his residential standing decided on the premise of his bodily keep within the nation or on the premise of supply of the revenue. In case of a resident of a rustic, his international revenue is taxed in India. Any revenue which has arisen in India is taxed within the arms of an individual no matter his residential standing underneath the revenue tax legal guidelines.

For figuring out whether or not an individual is resident or not, there are two fundamental standards. If one satisfies anybody standards, he’s handled as resident of India. Under the primary standards one turns into resident of India if he has been India for 182 days or extra. Since your son was not bodily current in India throughout each these years so he doesn’t fulfill the primary situation. Under the second situation an individual can nonetheless be a resident of India if he has been in India for 12 months or extra through the 4 years previous to that yr and was bodily current in India for 60 days or extra days through the related earlier yr. Since your son was not bodily current in monetary yr 20-21 and isn’t more likely to be current in India for greater than 60 days through the monetary yr 2021-22 he is not going to turn into a resident of India even when his mixture keep in India was greater than 12 months throughout 4 years previous each these years. Since he can be a non-resident for monetary yr 2021-2022, he should pay tax solely in respect of his Indian revenue. 

So for the monetary yr 2020-21 he has to make use of ITR 3 if he needs to file his ITR although he’s not required to file one since his revenue is under the taxable restrict of Rs. 2.50 lakhs. For the monetary yr which type to make use of will depend upon the ITR varieties notified by the federal government which is mostly carried out throughout April of the following yr. 

Balwant Jain is a tax and funding skilled and may be reached on jainbalwant@gmail.com and @jainbalwant on Twitter.

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