Ushma & Associates
Residential status consultancy:
A person shall be very clear about his residential status for Indian Tax purposes if he wants to save himself from unnecessary tax burden. His residential staus may have been changed due to unplanned or over stay in India or may be any other reason. Due to current pandemic situation, many people who went on the off shore projects were not able to come back due to suspension of flights while many NRIs who were working abroad got an option to work from home and hence they came back to India to stay with their family. All this shuffle resulted in change in their residential status for Indian taxation purposes. Also, there was an Amendment in Finance Act, 2020 which also brought few changes in provisions of residential status which added to the confusion.
Once a person is clear about his residential status, he can check whether his only Indian income or his foreign income as well is taxable in India.
A person can be Resident Indian or Non resident depending on his stay in India. A Resident Indian can be further divided between Resident and Ordinarily Resident (ROR) and Resident but Not Ordinarily Resident (RNOR).
For ROR, their global income is taxable while for NR only their Indian income is taxable. For RNOR, their Indian income and only that foreign income is taxable which is out of business controlled from India/Profession set up in India is taxable.