I am a non-resident Indian (NRI). During 2023-24, I earned capital gains (switch in and switch out) on a mutual fund, which was not offered to tax in my original return. I received an email from the income tax department under e-campaign to address my mismatch in income as offered in my original return with the annual information statement (AIS)/taxpayer information statement (TIS). What options do I have now?
-Name withheld on request
It is a common misconception that switching mutual funds does not result in capital gains simply because money does not get directly credited to the bank account.
Since you have earned capital gains but have not offered them to tax, your only option now is to file an updated tax return.
The Central Board of Direct Taxes (CBDT) vide circular no. 2/2024, dated 31 December 2024, has extended the due date from 31 December 2024 to 15 January 2025. However, this extension applies only to resident individuals and NRIs are not covered under this circular.
If you file your updated return before 31 March 2026, you will be liable to pay an additional tax of 25% (+ surcharge and cess) along with applicable interest.
You may also explore benefits under the respective double tax avoidance agreement (DTAA).
I run my own business in the US, where I have been living for the past 18 years. My family, except my parents, are US citizens, and everyone has an overseas citizen of India (OCI) card. In June 2024, I came to India and stayed here for approximately four months to attend to my father’s surgery and recovery. I’m likely to return to India again for another month in 2025. Otherwise, I usually visit India annually around the Christmas holidays for a month at most. Would this change my tax situation in India?
-Name withheld on request
An individual is considered a resident of India (a) if they stay in India for 182 days or more in the current fiscal year or (b) if they stay for more than 60 days in the current fiscal year coupled with a stay of 365 days or more in the preceding four fiscal years. The fiscal year in India is 1 April to 31 March. Since your stay during 2024-25 in India is not likely to be 182 days or more, neither has your stay during the past four fiscal years amounted to 365 days or more, you will continue to remain a non-resident for 2024-25. Accordingly, there will be no change in your residential status because of your unplanned extended stay in India during 2024-25.
Harshal Bhuta is partner at P.R. Bhuta & Co., Chartered Accountants.
