RNOR Filing Return : Does Overseas Income Have to be declared in ITR?

[nashontheweb]

Hi,

Within the RNOR period, when filing returns, does one have to declare overseas income ( which is exempt from tax)? My assumption is that since this is not taxable, this need not be reported in ITR (until it becomes taxable when status changes to ROR). My friend says it must be reported and exemption claimed. Who is right - my fiend or I?

Nash

[kkassociate]

Hi Nash,

During your RNOR period you should not report the Overseas source passive income as the same is not taxable in India. If the overseas source income is your active income i.e. your earned income then the same will be taxed here in India.

Regards,
KKA
US and India tax Filers.
www.kkassociate.com

[dbs]

Within the RNOR period, when filing returns, does one have to declare overseas income ( which is exempt from tax)? My assumption is that since this is not taxable, this need not be reported in ITR (until it becomes taxable when status changes to ROR). My friend says it must be reported and exemption claimed.

Your friend. Buy him a drink.
The returns contain an item where one reports income not chargeable to tax. Put it there and give reason why.

[nashontheweb]

Thanks KKA and dbs! I can see that opinion is divided (KKA says no need to report; dbs says report under tax exempt income).

KKA, I take it that when you say "active" income, you mean if I go overseas on assignment and earn fees or am paid an allowance overseas - this will be taxable, even if my tax status is RNOR. In the situation I describe above, the income earned overseas could be wages earned before R2I (but within current AY) - so not exactly passive, but not taxable nonetheless... would that change your recommendation?

Nash

[kkassociate]

Hi Nash,

The income earned by you before landing in India will not be taxable even it falls in the same Assessment Year.

Regards,
KKA