What is the definition of NRI as per Income Tax?
NRI as per Income Tax
NRI as per Income tax isn’t defined directly which means that there is no definition for Non Resident Indians (NRIs) under the IT Act, but it lays down certain criteria to certify citizens as residents of India.
New Rules for NRI Taxation
According to New Rules for NRI Taxation, a citizen will be a resident of India in the previous year, if:
1. They must be physically present in India for at least 182 days during the relevant fiscal year.
2. During the applicable fiscal year, their physical presence in India amounts to a minimum of 60 days and at least 365 days across the previous four fiscal years.
3. If an Indian citizen’s total income, excluding earnings from foreign sources, surpasses Rs. 15 lakh in the pertinent fiscal year, they are considered a resident. Additionally, they should not be subject to taxation in any other nation or territory due to their domicile or any similar determining factors.
The 60-day requirement is increased to 182 days if the individual departs India for employment overseas. For an Indian citizen or a Person of Indian Origin (PIO) living abroad and visiting India, the 60-day condition is extended to 120 days if their total income in India exceeds Rs. 15 lakh. However, if their total income (excluding earnings from foreign sources) is equal to or below Rs. 15 lakh, the 60-day requirement is lengthened to 182 days. Note: The rule of the deemed residency and 120 days came into effect from the financial year 2020-21.
The individuals not satisfying the two cases mentioned above will be treated as Non-Resident Indians (NRIs) according to the Income Tax Regulations.
Special Relief in view of Covid-19 Lockdown
For FY 2019-20, special relief is provided to individuals who visited India before March 22nd, 2020, under the following circumstances:
1. If they were unable to leave India due to the lockdown before March 31st, 2020, their stay between March 22nd and 31st will not be taken into account.
2. If they were quarantined due to Covid-19 on or after March 31st, 2020, and either left the country on an evacuation flight before March 31st or were unable to depart India, their period of stay from the start of the quarantine until March 31st will not be considered.
3. If they left India on or before March 31st, 2020, their time of stay from March 22nd, 2020, until their departure date will be excluded from consideration.
Other Definitions of NRI
Status Calculator for NRI as per Income Tax
You can calculate your stay in India and figure out whether you are eligible for the NRI Status or not. To know more about how to calculate your status, click here.
Tax Slab Rates for NRI as per Income Tax
NRI tax slab rates for FY 2022-23 (AY 23-24) are as under:
|Income Tax Slab||Old Regime Slab Rates for FY 22-23 (AY 23-24)||New Regime Slab Rates for FY 22-23 (AY 23-24)|
|Up to Rs. 2.50 lakh||Nil||Nil|
|Rs. 2,50,000 -Rs. 5,00,000||5%||5%|
|Above Rs. 5 lakh to Rs. 6 lakh||Rs. 12,500 + 20%||Rs. 12,500 + 10%|
|Above Rs. 6 lakh to Rs. 7.50 lakh||Rs. 12,500 + 20%||Rs. 12,500 + 10%|
|Rs. 7.50,000 to Rs. 9,00,000||Rs. 12,500 + 20%||Rs. 37,500 + 15%|
|Rs. 9,00,000 to Rs. 10,00,000||Rs. 12,500 + 20%||Rs. 37,500 + 15%|
|Rs. 10,00,000-Rs. 12,00,000||Rs. 1,12,500 + 30%||Rs. 75,000 + 20%|
|Rs. 12,00,000-Rs. 12,50,000||Rs. 1,12,500 + 30%||Rs. 75,000 + 20%|
|Rs. 12,50,000-Rs. 15,00,000||Rs. 1,12,500 + 30%||Rs. 1,25,000 + 25%|
|Above Rs. 15,00,000||Rs. 1,12,500 + 30%||Rs. 1,87,500 + 30%|
NRI income tax slab rates FY 2022-23
- Income tax exemption limit for NRI taxpayers is up to Rs. 2,50,000.
- NRIs opting for the new tax regime with lower rates will not be eligible for certain exemptions and deductions (like 80C, 80D, 80TTB, HRA).
- If they continue to pay taxes under the existing tax regime, NRIs can avail rebate and exemptions.
Due to a complicated tax system, understanding tax slab for NRIs and other tax laws can be confusing and NRIs may miss claiming deductions and other benefits. At SBNRI, we understand this struggle. You can download SBNRI App to connect with our NRI Tax Experts and get end-to-end assistance related to NRI tax filing. SBNRI will also help you get a lower TDS Certificate. You can also click on the button below to ask any questions. Visit our blog and YouTube Channel for more details.