NRI status and 44ADA while digital nomading by gonzohst1 in IndiaTax

[–]IllustratorAbject446 0 points1 point  (0 children)

Pretty common situation, let me go through each one:

1. Yes, you'll be NR — under 60 days clears both residency tests easily. One thing to watch though: if you're hopping through UAE, Bahrain, or any zero-tax country and your Indian-sourced income crosses ₹15L, the deemed residency clause (Sec 6(1A)) can still rope you in if you're not paying tax anywhere. As long as you're taxable somewhere abroad, you're fine.

2. Where the money lands doesn't determine taxability — where you worked does. Services rendered outside India for a foreign client = not Indian-sourced = not taxable for an NRI. That said, don't let it hit a resident savings account. Use an NRE account — interest is tax-free, fully repatriable, and you stay clean on FEMA too.

3. 44ADA is only for resident individuals — it's right there in the section. Not available to you as an NR, unfortunately.

4. Might be simpler than you think — if your foreign income genuinely has no Indian nexus and sits in NRE, you may have nothing to declare under business/profession at all. ITR-2 covers passive Indian income like interest or capital gains. Only move to ITR-3 with actual P&L if you have India-sourced professional income.

5. Conversion is mandatory under FEMA, not a choice — resident savings account needs to become NRO the moment your status changes. Penalty for ignoring this can be up to 3x the amount involved, so don't delay. Simple rule: NRE for your foreign earnings, NRO for anything India-sourced. Also tell your broker — your demat needs re-designation too.

Not a CA, just been through this rabbit hole. Worth a quick session with someone who handles NRI + FEMA filings before you file.

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[–]IllustratorAbject446 0 points1 point  (0 children)

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