Thu Sep 19 07:34:14 UTC 2024: ## Non-Resident Status in India: What You Need to Know
Becoming a non-resident in India triggers changes in both your tax obligations and financial dealings. As per Indian law, non-resident status is determined under two separate regulations: income tax laws and the Foreign Exchange Management Act (FEMA).
**Tax implications:**
– Non-resident status under income tax law depends on the number of days you physically reside in India during a financial year. This is determined after the year ends.
– Non-residents need to update their income tax e-filing profile and declare their residency status when filing their return.
– You must file a return if your income from India exceeds the basic exemption limit.
**FEMA regulations:**
– Non-residency under FEMA is based on intention rather than physical presence.
– You become a non-resident the moment you leave India for employment, business, or an indefinite period.
– While immediate compliance is impossible, you should quickly update your status.
**Key takeaway:**
Non-residents are not required to seek permission from the Reserve Bank of India (RBI) to earn income outside India. However, it is crucial to understand the tax and financial regulations governing non-resident status to ensure smooth transactions and compliance.
First Piper 