What is my ITR filing status if I recently shifted back to India from the US?

Each week, our experts answer readers’ queries related to personal finance and financial planning. Here are this week’s income tax queries from our readers.

I worked as a salaried employee in the US from 31 May 2014 to 21 August 2020. I have filed income tax in the US for all years from 2014 to 2020 (Jan-Dec). I have been working in India since August 2020. What would be my tax filing status for financial year 2020-21?

Amit Maheshwari, Partner, AKM Global, replies: Since you were in India from 22 August 2020 to 31 March 2021, your days spent in India are more than 182 days. It makes you a resident in India. Further, we need to determine whether you are resident and ordinarily resident (ROR) or resident but not ordinarily resident (RNOR). For becoming a ROR, the below conditions need to be satisfied… You must be a resident in India for at least 2 out of 10 previous years immediately preceding the relevant previous year, and.. You have been present in India for 730 days or more during 7 years immediately preceding the relevant previous year. Considering that you were in the US from 31 May 2014 to 21 August 2020, the second condition of being in India for at least 730 days in the previous 7 years is not satisfied. Hence, you will be considered as RNOR and your Indian income shall only be taxable in India.

I am 74. I have my own business. In 2000, I invested in equity shares and MFs jointly with my daughter as first holder. She became an US citizen eight years ago. Can she transfer the shares and MFs as a gift to me without any consideration? If so, what would the tax liability be when I sell later?

Divakar Vijayasarathy, Founder and Managing Partner, DVS Advisors LLP, replies: As the father is the joint owner of equity shares and MFs, consequent to the daughter transferring her rights in shares as a gift to her father, there shall not be any tax implications either in the hands of the daughter as well as father as per the income tax laws in India. The fact that the daughter is an US citizen shall not change the aforesaid implications. Further, when the father subsequently sells the equity shares and MFs, there shall be long term capital gains which shall be taxed in the hands of father. If the equity shares and MFs are listed and STT is paid on acquisition and transfer, it shall be taxable at the rate of 10% exceeding Rs 1 lakh. If the equity shares and MFs are unlisted, long term capital gains arising on its transfer shall be taxable at the rate of 20% with the indexation benefit.

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