How is NRI taxed on foreign income in Indian accounts?

Name withheld on request

To find out how your income will be taxed, it is important to first establish your residential status as per the Income Tax Act for each financial year. For FY23, this can be done if you satisfy any of the following conditions and both the additional conditions:

a) you are in India for 182 days or more in the financial year; and b) you are in India for 60 days or more in the financial year and for 365 days or more in the four financial years immediately preceding the relevant financial year.

In the above situation, the period of 60 days is substituted by 182 days for a citizen of India or a person of Indian origin (PIO), who resides outside India and comes to visit India in the said financial year. It also applies to a citizen who leaves India in the said financial year for the purpose of employment outside India or as a member of the crew of an Indian ship.

The total income, other than from foreign sources, of a person who is a citizen of India and is not liable to tax in any other country or territory, exceeds 15 lakhs during the said financial year, shall be deemed to be a resident of India.

For a citizen or a PIO who is on a visit to India, if the total income, other than income from foreign sources, exceeds 15 lakhs 60 days is replaced by 120 days; Otherwise, 60 days is replaced by 182 days. Such persons are considered as deemed residents.

additional conditions: You are resident in India in two of the 10 financial years immediately preceding the relevant financial year; and you are in India for 729 days or more in the seven years immediately preceding the financial year to which it relates.

Archit Gupta is the Founder and CEO of Clear.in.