Residential position definition varies in regulations

My daughter has been being and operating in the US on an H-1B visa for…

My daughter has been being and operating in the US on an H-1B visa for the past two years. Does she qualify as a non-resident Indian (NRI)? Can she transfer resources to me in India for conference my fees? Are these resources taxable?

—Name withheld on ask for

The regulations that ascertain the residential position of a man or woman below the trade control law are distinctive from all those beneath the money tax law. Below the revenue tax regulation, any “citizen of India” or “person of Indian origin” who lives outside the nation and only would make visits in this article, will qualify as a non-resident in India beneath the following situations: Bodily existence in India for the duration of the relevant economic 12 months is much less than 182 days, and India-sourced revenue is less than 15 lakh physical existence in India during the suitable economic 12 months is considerably less than 120 times even if India-sourced revenue exceeds 15 lakh and bodily presence in India in the course of the related monetary 12 months is 120 times or additional but less than 182 days and considerably less than 365 days in the preceding four money decades, even if the India-sourced cash flow exceeds 15 lakh.

Having said that, less than the trade command law, when a person leaves India for employment, for carrying on enterprise, or for any other goal indicating his/her intention to continue to be outside the house India for an unsure period, he/she may well be regarded as as a “person resident outside the house India”. Assuming your daughter is protected under the previously mentioned eventualities, she may well qualify as an NRI under the exchange management law.

Further, your daughter may perhaps remit her earnings to you for meeting your expenditures in India. Less than the profits tax regulation, where by any sum of cash exceeding 50,000 is obtained by an person without having thought from any man or woman, the similar is taxable in the arms of the recipient person. On the other hand, gifts from a relative are not liable to tax in the palms of the receiver or in the arms of the man or woman offering the gift. The time period ‘relative’ is described to contain spouse, brother or sister, brother or sister of the spouse, brother or sister of both of the mother and father, any lineal ascendant or descendant, any lineal ascendant or descendant of the wife or husband, and other individuals.

Appropriately, there will no money tax implications in India on transfer of money by your daughter to you for conference your fees in India possibly for you or your daughter.

Sonu Iyer is tax partner and individuals advisory products and services leader, EY India.

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