Shweta Bhatia asked on 18/03/2020

What is the definition of NRI as per Income Tax?

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SBNRI Team
answered on 18/03/2020

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 criterias to certify citizens as residents of India.

 

NRI as per Income Tax

 

According to Income Tax regulations, a citizen will be a resident of India in the previous year, if:

  1. He/she is in India for at least 182 days in that year, OR
  2. If the individual was not in India for at least 182 days in the previous year but he/she was in India for at least 365 days during the last 4 years to that year and at least 60 days during that year

Case 1: Consider you were in India for 207 days in 2019, then you are a resident of India for 2019.

Case 2: Say, you were in India for 70 days in 2019, then you fail the first criteria! But you were in India during the entire time span of 2014-2018. Then you are a resident of India in spite of not being in the country for at least 182 days in 2019.

 

The individuals not satisfying the two cases mentioned above will be treated as Non-Resident Indians (NRIs) according to the Income Tax Regulations.

 

Amendment in the Definition of NRI as per Income Tax

The Income Tax Act amendment of 2020 is for NRIs whose taxable income in India exceeds Rs. 15 Lakhs, The amended criteria are as follows:

  • If the individual is in India for at least 120 days (compared to the previous 182 days threshold) in the previous year, then
  • We calculate whether he/she was in India for at least 365 days during the last 4 years to that year

If the criteria is satisfied, they become Residents.

 

 

Other Definitions of NRI

NRI Status Eligibility

In order to become an NRI, there are certain criteria one must fulfill, which are as follows:

 

1. A citizen of India must stay overseas for 183 days or more in one financial year

2. If a citizen of India stays in India for less than 365 days in the last 4 years from the year of assessment and less than 60 days during the year being tested for eligibility.

 

(For example: In order to become an NRI for 2019, you must stay in India for less than 60 days in 2019 and less than 365 days in the total time span of 2014-2018)

 

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

 

Income Tax Slab

Tax Rate
Up to 2.5 Lakhs

Nil

2.5 Lakhs to 5 Lakhs 

5%
5 Lakhs to 7.5 Lakhs

10%

7.5 Lakhs to 10 Lakhs

15%
10 Lakhs to 12.5 Lakhs

20%

12.5 Lakhs to 15 Lakhs

25%
15 Lakhs and above

30%

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