After the amendments to the Financial Bill in 2020, for the purpose of tax calculation, an individual can be included as a NRI in case he stays for:

The correct answer is 120 days.

Key Points

• After the amendments to the Financial Bill in 2020, an individual is classified as a Non-Resident Indian (NRI) for tax purposes if their stay in India is less than 120 days during the financial year.
• Previously, the threshold for determining NRI status was 182 days, but this was revised to 120 days to prevent tax evasion by high-net-worth individuals.
• This amendment applies to individuals whose total income, excluding foreign income, exceeds ₹15 lakh during the financial year.
• The change was introduced to align residency rules with international taxation standards and ensure that individuals contributing significant income in India are taxed appropriately.
• Such individuals are taxed only on income earned or accrued in India, safeguarding their foreign earnings from Indian taxation.

Additional Information

• Non-Resident Indian (NRI): An NRI is an Indian citizen residing outside India for employment, business, or other purposes, or stays outside India for an uncertain duration.
• Financial Bill 2020 Amendments: These amendments aim to streamline tax residency criteria and eliminate loopholes that enable tax avoidance.
• Tax Residency in India: Individuals are categorized as "resident" or "non-resident" based on the duration of their stay in India during the financial year.
• ₹15 lakh Threshold: This income limit applies to the revised residency rules; individuals earning below this threshold remain unaffected by the 120-day rule.
• Global Taxation Standards: Countries worldwide use residency criteria to determine tax liability, with India revising its rules to align with international norms.