Direct Tax Code---Residential status in India – Restriction of 60 days stay F.Y 2012-13

Direct Tax Code---Residential status in India – Restriction of 60 days stay Does it really apply to all NRIs  ????? Or Is it exceptional for few? IT IS EXCEPTIONAL ONLY FOR FEW The major change introduced by the DTC is in the criteria of determining the residential status of NRIs who, are working abroad, and come on visit to India. Currently, such NRIs who are citizen of India or Person of Indian Origin (PIO) are regarded as resident, only if, they stay in India for 182 days or more in the financial year. However, under the proposed DTC, any inbound individual  (including NRIs/PIO) will become resident, if they are present in India for 60  days  or  more  in  the  financial  year  and  365  days  or  more over a period of four years prior to the financial year. However in general it is not correct to opine that under the proposed provisions of the Direct Tax Code, in relation to the ‘Residential Status’, the NRI shall be resident in India if he stays for more than 60 days in India in a financial year (1st April to 31 st  March) and attract Indian tax liability in respect of his income earned outside India. In  nutshell,  we  advise  that  NRI  may  stay  in  India for more than 60 days in a financial year and yet he shall continue to special status of “Resident but Not Ordinarily Resident” under the Income-tax Act, 1961 for tax purposes and even under proposed DTC and shall not be liable to tax in India in respect of his income earned outside India. To a large extent, the majority of the NRI’s may not be adversely affected by the proposed changes. It is important for NRI to know that if he has stayed in India for less than 364 days in past 4 years or less than 728 days in past 7 years than his tax liability shall be restricted to income earned in India only even if his stay in India is more than 60 days in a year.  He  can  stay  in  India  up  to  90  to  120  days  or may be little more depending upon his past stay in India and yet not covered by the proposed DTC PROVISION. We can assist the NRI’s to know his Income tax  status under the proposed DTC and no of days he can stay in India ( even beyond 60 days) for the financial year1st April 2010 – 31 st March 2011 and subsequent one to three  years Twitter Delicious Digg Facebook Stumbleupon RSS About the Author I`m SENTHAMARAIKANNAN Author Of Senthamaraikannanclub and i interested in Blogs and socialnetworking I wrote so many blogs in my name since 2007.Follow me On Twitter, Like us On Facebook, Join us on Google +