I was working abroad and have now resigned from my job and want to come back to India. After I leave that company, I will be entitled to receive retirement benefits, which I want to bring back with me to India. Can you please tell me if my retirement money (which is a lump sum amount) will be taxed since 2002 if I file my tax return as a resident Indian in 2016-17?
—Tilak Mahajan
Taxability in India depends on the following factors:
► Source of income
► Residential status.
Any income, the source of which is located in India, is taxable in India (irrespective of residential status).
Residential status is determined on the basis of physical presence of an individual in India during a financial year (FY) (i.e., from 1 April to 31 March) (including work days and non-work days) and the preceding 10 FYs.
You will qualify as a non-resident in India if:
(a) Your stay within India during the current FY is less than 60 days
(b) Your stay within India during the current FY is more than 60 days but less than 182 days and your stay in India during the four immediately preceding FYs is less than 365 days.
A non-resident is taxable on India-sourced income (i.e., income that is earned in India or received in India).
Accordingly, your retirement money, which is earned and directly received outside India and then subsequently repatriated to India, will not be taxable in India.
