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Tax Expert - Answered on May 26, 2023

Question by Shailendra on Apr 07, 2023

My daughter studying in Germany was outside India in 2022-24 for more than 182 days. She has income from there from parttime job and paid Internship. In India she has Income share investment capital gain and dividend. How she will be taxed. Should I change 3in 1 Saving bank account.

Ans: Hi Shailendra
Assuming that you are referring to FY 2022-23, as your daughter was outside India for more than 182 days, her income in Germany would not be taxable in India. You need to note that she should not get the income credited in India in the first instance. She could deposit the income in Germany first and then remit it to her NRO or NRE account in India.

She needs to get her savings account in India redesignated as NRO account

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Question by Shailendra - Apr 07, 2023

My daughter studying in Germany was outside India in FY 2022-23 for more than 182 days. She has income in Germany from parttime job and paid Internship. In India she has Income from share investment /MF capital gain/loss and dividend. How she will be taxed in India. Should I change her 3 in 1 Saving bank account with ICICI Direct.

Ans: Dear Shailendra,

As your daughter was outside India for more than 182 days during the financial year 2022-23, she would be considered a Non-Resident Indian (NRI) for tax purposes. I'll outline the tax implications for her below.

Income earned in Germany: As an NRI, your daughter will not be taxed in India for the income she earned in Germany through her part-time job and paid internship. She will need to pay taxes on this income according to the tax laws in Germany.
Income from share investments, mutual funds, and dividends in India: As an NRI, your daughter will only be taxed on her income that is earned or accrued in India. This includes:
Short-term capital gains on equity shares and equity-oriented mutual funds: These will be taxed at a rate of 15%.
Long-term capital gains on equity shares and equity-oriented mutual funds: Gains exceeding ₹1 lakh will be taxed at a rate of 10%.
Short-term and long-term capital gains on non-equity investments (e.g., debt mutual funds) will be taxed as per the applicable slab rates for NRIs.
Dividends: Dividends received from Indian companies will be subject to tax deduction at source (TDS) at a rate of 20% (plus applicable cess and surcharge).
Regarding your query about changing her 3-in-1 savings bank account with ICICI Direct, it is advisable to inform the bank about her change in residential status and convert the account into an NRO (Non-Resident Ordinary) account. This will help in managing the tax compliance for her investments in India.

Please note that the Double Taxation Avoidance Agreement (DTAA) between India and Germany may provide relief from being taxed on the same income in both countries. Your daughter should consult a tax professional in Germany to understand the applicable provisions and claim any benefits available under the DTAA.

I hope this information helps.

Best regards

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I shall be grateful if you could kindly arrange reply to my following tax query. My daughter was NRI for F.Y. 2018-19 as well as 2019-20. She had some income in India during both F.Y.s by way of Dividend/Interest from her investments, as also capital gains from sale of shares / mutual fund units, total of which was less than Rs.1,50,000 during each of these 2 years. She was a student abroad during whole of F.Y. 2018-19. She was employed during part of F.Y. 2019-20 (less than six months) and drew income by way of salary. 1. Is she required to file return of Income in India for A.Y. 2019-20 and A.Y. 2020-21? Anil Rego An NRI whose income is below the basic exemption limit is required to file an income tax return in India if: One has short term capital gains on equity which is taxable One has long term capital gains on any asset, which are chargeable to tax Has any income chargeable to tax irrespective of the basic exemption limit Please note the above since you have mentioned that there was capital gain in her account. If yes, which ITR forms should she be using?

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My daughter was NRI for F.Y. 2018-19 as well as 2019-20 and continues to be NRI. She had some income in India during both FYs by way of Dividend/Interest from her investments, as also capital gains from sale of shares/mutual fund units. Her total income during F.Y. 2018-19 and 2019-20 was less than Rs 150,000 from these sources. She was a student abroad during whole of F.Y. 2018-19 while during part of F.Y. 2019-20 (less than six months), she was employed abroad and drew income by way of salary. Is she required to file return of Income in India for A.Y. 2019-20 and A.Y. 2020-21?-

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Question by Praveen - Aug 25, 2022

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: Your question is a little unclear because you have not given year by year data. Further, I am assuming that you are asking for the status in FY 2022-23.

For a person to qualify as Resident Indian she should stay in India for more than 182 days in a year or she should stay in India for the immediately 4 preceding years is 365 days or more and 60 days or more in the relevant financial year.

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