If your total income exceeds ₹15 lakh and you spend more than 120 days in India in a financial year, you will be considered a resident but not ordinarily resident (RNOR) in India
I stayed outside India for more than 250 days in 2019. Since I am not a resident of any other country, I don’t pay taxes elsewhere. Will I be an NRI for tax purposes for this year?
—Name withheld on request
There are certain amendments to laws related to residential status. These are effective FY21. If your total income exceeds ₹15 lakh and you spend more than 120 days in India in a financial year, you will be considered a resident but not ordinarily resident (RNOR) in India.
I am returning to India after three years. My non-resident external (NRE) account has a few fixed deposits (FDs) but they are not maturing this year. Will I have to break them or continue them till maturity? Is the taxability of FDs the same for NRIs?
—DJ
If you are planning to return permanently and do not intend to go back, you should make a declaration to your bank. In such a situation, you cannot continue to hold on to your NRE deposits and all your NRI accounts must be converted to resident accounts. When your deposit accounts are converted, interest earned on them shall be fully taxable in India. Therefore, even though your residential status may be that of an NRI, you will have to pay tax on these deposits and file income tax return. TDS will also be deducted before interest is credited to you.
I was an Indian national but now I am a UK passport holder. I have a permanent account number (PAN) card and an overseas citizenship of India (OCI) card. I file my income tax return in India on the interest and rental income accruing in India. Do I need to link my PAN with Aadhaar? Can I apply for Aadhaar as I hold a UK passport?
—Gurarjun Vir Singh
As per the Aadhaar Act, a resident can obtain an Aadhaar. An individual who has resided in India for a period of 182 days or more in the 12 months immediately before the date of application for enrolment of Aadhaar is a resident. The requirement of linking PAN with Aadhaar does not apply to NRIs. However, an NRI may require an Aadhaar to carry out certain financial transactions and they are eligible to apply for it. If you have an Aadhaar, you may link it with your PAN.
Archit Gupta is founder and chief executive officer, ClearTax. Queries and views at mintmoney@livemint.com
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