I shall be grateful if you could kindly arrange for clarification on following query through your tax expert.

My daughter has been NRI for Financial Years 2018-19, 2019-20 and 2020-21.

In current FY, because of pandemic, she was in India for a total of 123 days on 'Work from Home' assignment. What will be her residential status for FY 2021-22, considering that her total stay during preceding 4 years (2017-18 to 2020-21) will exceed 365 days?

In 2017-18, she was an ordinary resident while in 2018-19, she was in India for 5 months. Her taxable income in India for current financial year will be less than Rs 3 lakh.

Ans: Here's how to determine your daughter's residential status for Income Tax (AY 2023-24), Bank, Demat account, and income from investments based on the information provided:

Income Tax Residential Status:

For Assessment Year (AY) 2023-24, your daughter's residential status will likely be Non-Resident (NR).

Here's why:

• She left India for studies in June 2020, indicating she might not have met the physical presence criteria in India during the relevant financial years (FY).

To be considered a resident for tax purposes in India, an individual needs to meet at least one of the following conditions:

• Stay in India for 182 days or more in the relevant financial year (FY 2022-23).
• Stay in India for at least 60 days in the relevant financial year AND for 365 days or more during the four preceding financial years (unlikely in this case since she left in 2020).

Important Note:

It's important to consider the entire period from June 2020 to March 2023 (covering FY 21-22, FY 22-23) to determine the residential status definitively.

Recommendation:

For a more precise assessment, it's advisable to consult a tax professional as they can consider all aspects of your daughter's situation, including:

• Exact number of days spent in India during FY 21-22.
• Nature and source of her income (if any) from investments.
• Any tax residency certificate she might have obtained in Germany.

Bank and Demat Account:

• Bank: Many banks might categorise your daughter as a Non-Resident (NR) based on her stay in India.
• Demat: Similar to the bank, the Demat account might also be categorised as non-resident if it aligns with her tax residency status.

Income from Investments:

• Tax implications on income from investments (e.g., dividends, interest) will depend on the type of investment, the source (India or abroad), and the tax treaty (if any) between India and Germany.

Further Resources:

Income Tax Department - Non-Resident Individual for AY 2023-2024: https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-0

Remember, this is a general overview, and consulting a tax professional is highly recommended for specific advice tailored to your daughter's situation.

Ans: 01. Since you are Resident Citizen in 2023-24 & your status during F/Y 2024-25 cannot be confirmed till the year under reference is complete.
02. Under these circumstances, your status would be treated as Resident Citizen, for the purpose of applicability of TDS on sale of property at present.
03. In my opinion, you should be subject to 1% TDS, while selling the property in normal case.
04. However, if you become NRI for with reference to F/Y 2024-25, You should file your ITR as NRI & not as Indian Citizen.
Most welcome for any further clarification. Thanks.