NRI Taxation for FY 2020-21
Budget 2020

HOW TO DETERMINE RESIDENCY IN INDIA (ON THE BASIS OF NO. OF DAYS STAY IN INDIA):

Indian citizens visiting India

• They will now qualify as residents if their stay in India is:

1. More than 120 days (earlier limit was 182 days) between 1^st April 2020 to 31^st March 2021, and
2. More than 365 days during the preceding four previous years i.e. 1^st April 2016 to 31^st March 2020.

Change in condition for qualifying as Not Ordinary Resident (NOR)

• Existing provisions provide two criteria for an individual to qualify as NOR. The individual:

1. Is a non-resident in 7 out of 10 preceding years(earlier limit was 9 out of 10 years), or
2. Stays in India for 729 days or less in seven preceding years.

Deemed residency criteria for citizens of India

• The Budget proposes to introduce the concept of citizenship-based taxation in a limited manner.

1. Indian citizens, who are not liable to tax in any other country by virtue of residency, domicile or any other similar criteria would be deemed tax residents of India.
2. This may result in global income being liable to tax in India, unless they qualify as NOR based on the new condition proposed.

Exempting non-resident from filing of Income-tax return in certain conditions

• Amendment in section 115A in order to provide that a non-resident, shall not be required to file return of income if: –

• His or its total income consists of only dividend or interest income or royalty or FTS(Fees for technical services) income &
• TDS on such income has been deducted.

Note: To claim Income Tax Refunds because higher tax has been deducted at Source, Non Residents should file income tax return.