External income of RNORs is not taxable

 







To find out whether your income shall be taxed in India, you need to establish your residential status as per the Income Tax Act of India for the relevant financial year. You can test your residential status in the following manner.

Conditions: a) you are in India for 182 days or more in the financial year (FY); or b) you are in India for 60 days or more in the FY and 365 days or more in the four FYs immediately preceding the relevant FY. Additional conditions: You are resident in India in two of the 10 FYs immediately preceding the relevant FY; and you are in India in the seven years immediately preceding the relevant FY for 729 days or more. If you meet any of the first set of conditions and both the additional conditions, you shall be considered a resident in India. If you meet any of the first conditions, but do not meet the additional conditions, you shall be considered a resident but not ordinarily resident (RNOR) in India.

If you do not meet any of the first conditions, you shall be a non-resident in India.

Immediately after returning, your residential status is likely to be that of a non-resident and RNOR for sometime. For a non-resident and RNOR, only the income that is earned or received in India shall be taxable in India.

Once you become a resident of India, all your global income shall be taxable.

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