Cash gifted over Rs50,000 by an NRI buddy in a monetary 12 months may be taxable


I’m a small enterprise proprietor in India and planning to open a sequence of stalls. A Dubai-based buddy of mine is contributing to the venture, however desires it to be a present. How will the gifted quantity be taxed in my arms?

—Identify withheld on request

Assuming that you may be incorporating the venture as a authorized entity, maybe an organization, there are a number of guidelines and laws round receiving seed funding, loans, overseas direct funding and having excessive networth people (HNIs) put money into an Indian venture. Items are normally obtained in a private capability and to not be invested for particular functions. Even private presents obtained by people who find themselves tax residents of India from associates of worth exceeding 50,000 in mixture in a monetary 12 months are taxable within the arms of the recipient. Observe that complete quantity obtained turns into taxable.

I’m a non-resident Indian (NRI) and have been dwelling outdoors India for the previous 12 years. My mother and father are in India, and I go to them periodically. As they’re getting older, the frequency of my journeys has elevated and I spend extra time again residence. I don’t have any revenue in India, and pay taxes within the nation of my residence for the wage I earn right here. How lengthy can I keep in India with out affecting my NRI standing? Is there a particular provision for conditions resembling mine the place medical causes are concerned?

—Sukhdev Singh

You will need to decide your residential standing for every monetary 12 months. You possibly can check your residential standing within the following method. You will need to meet any of the next situations and each the extra situations:

Circumstances: a) you might be in India for 182 days or extra within the monetary 12 months (FY); or b) you might be in India for 60 days or extra within the FY and twelve months or extra in 4 FYs previous the related FY.

Further situations: you might be resident in India in two of the ten FYs previous the related FY; and you might be in India within the seven years previous the related FY for 729 days or extra.

When you meet any of the primary set of situations and each the extra situations, you shall be thought-about a resident. When you meet any of the primary situations, however don’t meet the extra situations, you shall be thought-about a resident however not ordinarily resident (RNOR). If you don’t meet any of the primary situations, you shall be a non-resident.

Sure modifications to residential standing have been led to efficient FY21. The interval of 182 days talked about above has been diminished to 120 days for all these visiting people who’ve revenue exceeding 15 lakh in the course of the monetary 12 months. Such people will likely be thought-about RNOR for the mentioned monetary 12 months if their keep exceeds 120 days. Due to this fact, NRIs with complete revenue of as much as 15 lakh shall proceed to be NRIs if their keep is 181 days or much less per the situations talked about above.

NRIs and RNORs are taxed in India for revenue that’s earned or obtained in India. Principally you possibly can proceed to carry your RNOR standing for round two years primarily based on the standards talked about above. When you change into a resident, your world revenue will likely be taxed in India.

Archit Gupta is founder and chief government officer, ClearTax. Queries and views at

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