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Residential status determines tax implementation
May, 22nd 2015

My employer did not consider my non-resident Indian (NRI) status for computing tax. How can I rectify this?

In case your status will impact your taxes, you could claim excess taxes paid in your tax return. If the taxes are for financial year (FY) 2014-15, the due date for filing of tax return is 31 July 2015. If they are for FY 2013-14, the tax return can be revised until 31 March 2016, provided your original return was filed by due date, i.e., 31 July 2014.
I plan to come to India for a year. Will my status change to that of a resident? Will I have to declare my global income to Indian tax authorities?


Residential status of an individual in India is dependent on physical presence in India during the financial year. If you satisfy any of the basic conditions mentioned below, you would qualify as a resident; otherwise, you would qualify as a non-resident.

The conditions are: If stay in India during the financial year is 182 days or more, or stay in India during the FY is 60 days or more and in the four years immediately preceding the financial year is 365 days or more. However, if you come to India on a “visit” and “visit” has not been defined under the Indian tax law (but would not include visit for employment), the 60-day period in the above basic conditions would be substituted for 182 days.

A resident may either qualify as an ordinarily resident or not-ordinarily resident.

If any of the additional conditions mentioned below are not met, then you would qualify as a not-ordinarily resident; otherwise, you would qualify as an ordinarily resident. There are some additional conditions as well: 1) resident in India in nine of 10 financial years preceding the relevant financial year, or (2) stay in the seven years preceding the relevant financial year is aggregate 729 days or more. Only if you qualify as an ordinarily resident would you have to declare your global income and global assets in your Indian tax return.

If after set-off of tax deducted in Australia, it is found that excess tax has been paid, is it refundable in India?


Set-off of tax by way of tax credit under the India-Australia double tax avoidance agreement is the minimum of tax paid in Australia, and proportionate Indian tax on doubly taxed income. In case excess tax is paid in Australia (because of a higher tax rate), it cannot be claimed as refundable in India.

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