How are you taxed when you are a NRI
Resident Individual on a temporary foreign assignment
Rahul worked out of Singapore on a temporary assignment of 4 months and earned in Singaporean Dollars during that time. He got this income credited to a bank account here in India. He has returned back home now. How should he file his income tax return?
Rahul’s taxes for this year will depend on his residential status. Since Rahul has not been outside of India for more than 182 days, he will be considered a resident.
He will be required to file his income taxes in India this year. This will also include his salary earned during the foreign assignment in Singapore.
If the assignment extends to more than 182 days, Rahul’s residential status will change and he will be required to pay taxes only on the Indian income earned thus far. Here note that, Rahul’s foreign income credited to an Indian bank account is taxable in India.
The I-T Department allows RNORs to continue to enjoy exemptions available to NRIs for a period of 2 years after their return. Therefore, deposits held in foreign currency, which are exempt for an NRI, shall be exempt to returning NRIs for 2 years.
After these 2 years, returning NRIs are treated as resident individuals.
How are you taxed when you are a NRI
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