Indian citizens relocate abroad for a variety of reasons, including work, commerce, education, or other objectives. Some residents' status switches to NRI after spending a specific amount of time abroad. If you break any of the FEMA (Foreign Exchange Management Act) norms and regulations when your residential status switches to NRI, you could face both financial and legal repercussions. For instance, NRIs must register an NRI account because they are unable to use a conventional savings account. Also, NRIs are subject to slightly different tax laws. However, there is no penalty for not declaring NRI status.
Get expert legal assistance service for property document verification from NoBroker Check out the NRI property management service of NoBroker What is the penalty for not declaring the NRI status?The Foreign Currency Management Act (FEMA) states that failing to declare one's status as an NRI carries NO penalties. You must, however, cancel your present savings account or arrange for its conversion to an NRO account. The FEMA guidelines deem it illegal for an NRI to maintain his or her resident savings account after obtaining NRI status and doing so might result in severe penalties.
How to Determine NRI Status?Let's start by determining how someone becomes an NRI. If a person satisfies any of the following criteria for a financial year, they will be classified as a resident of India:
If he or she spends at least 182 days in India within the applicable fiscal year, or
If he/she is in India for a period of 60 days or more during the previous year and 365 days or more during the 4 years immediately preceding the previous year.
Anyone who doesn't meet both of the aforementioned requirements will be considered a non-resident for the previous year. Nonetheless, the government updates its taxation and NRI status regulations every year.
I’d like to conclude my answer here about the penalty for not declaring NRI status. I hope this helps:)
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What is the Penalty for Not Declaring the NRI Status?
pratik
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2023-04-07T06:31:32+00:00 2023-04-07T07:09:58+00:00Comment
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