Becoming a non-resident: Essential checklist for income tax and FEMA compliance | Mint
Source: Live Mint
The status of being a non-resident in India is determined under two different laws: income tax laws and the Foreign Exchange Management Act (FEMA).
The first law impacts the taxability of income earned in India and outside India. The second one regulates investments and banking transactions in India.
In this article, we will discuss what you need to do when you become a non-resident.
Under the income tax laws
An individual’s non-resident status under the income tax laws. It depends on their physical stay in India during the financial year. Generally, this status is determined after the end of the year.
As a non-resident, you should update your income tax e-filing website profile and state your residential status when filing your income tax return (ITR). You must also file an income tax return if your Indian income exceeds the basic exemption limit.
Under FEMA laws
Under FEMA, non-residency is based on intention rather than physical stay. You become non-resident when you leave India for employment, business or an indefinite period. Technically, you become a non-resident as soon as your flight departs. Although it is impossible to comply immediately, you should complete the following steps quickly.
You do not require any RBI permission to earn income outside India.
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Balwant Jain is a tax and investment expert and can be reached on jainbalwant@gmail.com and @jainbalwant on his X handle.
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