Is Rental return from overseas property taxable in India?

jd2170a · Post by **jd2170a** » Fri Apr 15, 2011 10:31 am

My take on it--
ROR and RNOR applies only to Indian citizens. When an Indian citizen spends time abroad, he is a NRI, comes back after 9 years he is a RNOR and so on. A non-Indian national with OCI will have the status of a NRI (there are no qualifying clauses mentioned on the ministry website with regards to residence). So I'm thinking USC+OCI is NRI irrespective of where and how long he lives. An NRI is only taxed on his Indian income and overseas rental income is not taxable.

dbs · Post by **dbs** » Fri Apr 15, 2011 12:08 pm

jd2170a;382994 So I'm thinking USC+OCI is NRI irrespective of where and how long he lives. An NRI is only taxed on his Indian income and overseas rental income is not taxable.

My advice will be to use some one else's thinking as well. Consult a knowledgable CA. If one is resident in India, then the global income is taxable, barring the period of RNOR.
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jd2170a · Post by **jd2170a** » Fri Apr 15, 2011 2:44 pm

[dbs--QUOTE My advice will be to use some one else's thinking as well. Consult a knowledgable CA. QUOTE]

Want to check out some one else's thinking hence the post. Have to consult a CA. But a OCI has

"Parity with Non
resident Indians (NRIs)
in respect of economic,

financial...", as per Ministry of Home Affairs. There is no mention of the OCIs residence status. So saying that "OCI is on par with a NRI irrespective of OCI's residence status" won't be an incorrect interpretation. After all the OCI is not a Indian national and non-Indian nationals are only taxed by the Indian govt. for their Indian income only. But it is safer to assume otherwise and stump up the tax to GoI for foriegn rental income.

mkngtrbl · Post by **mkngtrbl** » Fri Apr 15, 2011 3:15 pm

Tax resident and citizenship / immigration status are not always the same.

http://www.vakilno1.com/nri/taxation/definitions.htm may help.

jd2170a · Post by **jd2170a** » Fri Apr 15, 2011 5:14 pm

thanks makingtrble. Your link clarifies who is considered a resident etc. But what's not clear is if a OCI will be on par with NRI even if the OCI is resident as per the definition in your link. I think the OCI definition came about later to the "resident" definition. Also, is a non-Indian citizen who is resident in India taxable for his foriegn rental income? I must say, this is somewhat an academic exercise, because to play it safe an OCI should simply pay tax on his foriegn rental income.

mkngtrbl · Post by **mkngtrbl** » Fri Apr 15, 2011 6:27 pm

From my understanding, the rental income for foreign property would not be taxable for a foreign citizen who is a tax resident of India. Tax would be payable for any income generated for work done in India irrespective of who is paying (a domestic or foreign entity). Not something I have had to ever find out about because it does not apply to me.

mkngtrbl · Post by **mkngtrbl** » Mon Apr 18, 2011 8:50 am

mkngtrbl;383033From my understanding, the rental income for foreign property would not be taxable for a foreign citizen who is a tax resident of India. Tax would be payable for any income generated for work done in India irrespective of who is paying (a domestic or foreign entity). Not something I have had to ever find out about because it does not apply to me.

I stand corrected. Thank you Rajesh.
http://www.r2iclubforums.com/forums/showthread.php/23755-Declaring-US-assets-to-India-upon-end-of-RNOR-status?p=383343#post383343