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NRI's: Incomes That Are Charged to Tax in India
The Income-tax Law has its own set of provisions for determining the residential status of a person.
The residenstal status depends on a person earning income is very much relevant for determining the taxability of such income in his hands.
Hence, residential status plays a vital role in determining the taxability of the income.
The following chart highlights the tax incidence in case of different persons:
| Nature of income | Residential status | ||
| ROR (*) | RNOR (*) | NR (*) | |
| Income which accrues or arises in India | Taxed | Taxed | Taxed |
| Income which is deemed to accrue or arise in India | Taxed | Taxed | Taxed |
| Income which is received in India | Taxed | Taxed | Taxed |
| Income which is deemed to be received in India | Taxed | Taxed | Taxed |
| Income accruing outside India from a business controlled from India or from a profession set up in India | Taxed | Taxed | Not taxed |
| Income other than above (i.e.,income which has no relation with India) | Taxed | Not taxed | Not taxed |
* Where ROR stands for resident and ordinarily resident. RNOR means resident but not ordinarily resident. NR means non-resident.
Incomes are treated as incomes deemed to be received in India:
- Interest credited to recognised provident fund account of an employee in excess of 9.5% per annum.
- Employer's contribution to recognised provident fund in excess of 12% of the salary of the employee.
- Transferred balance in case of reorganisation of unrecognised provident fund.
Source: IncomeTax Site
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