I may move to Europe next FY year for 3-5 years or more. I am currently trading using my individual account in Zerodha. I am earning more than 1 crore every year.
Charges for NRI account in Zerodha is too high, and it will kill trading option. So I can’t trade in my name, If I open NRI account.
But, I did not understand the rules clearly. Do I have to open NRI account, If I stay in Europe for more than 182 days, even if my income is more than 15 lakh in India? Do I have an option to “skip/avoid” NRI status or it is mandatory?
I won’t be doing any job in Europe and won’t have any income in Europe probably.
Any way,I can trade using normal account in my name?
Your tax status will be determined based on the number of days you are in the country. Hope this is very clear.
if you do not have any income from abroad, then there is no need for you to open a separate NRE account. This account is opened in bank to enable NRI to remit funds from abroad and avoid tax on the these funds. I am sure you are aware that for NRI, amount remitted from abroad to your NRE account is fully tax exempt. However, It is mandatory that you need to convert your existing savings account to NRO account.
Do note that for NRO accounts, TDS will be deducted at source irrespective of the interest amount. It is upto you to open a NRE account or not. If you do not expect to earn funds then there is no need.
The complication starts when it comes to your demat account. The same rules will apply and you will have re-designate all of your trading accounts as NRO. Please do speak to your broker on this aspect.
Disc: Please do your own research, things written above is from my knowledge and could be wrong.
Another amendment has been made regarding Deemed Residential Status, which states that a person is deemed to be an Indian Resident if he is not tax liable in any foreign country. However, this status will be given only when the total taxable Indian income of the person is more than 15 lakh.
I will be liable to pay tax in Europe. But If I don’t earn anything, I won’t pay anything. So Can I be Indian Resident, using this rule? Since I will pay tax only in India and my income will be more than 15 lakh. @neha1101 thank you. I did not understand this line.
My apologies, I have a vague idea about deemed resident but do not wish to confuse you with that. I would advise you to please speak to a tax expert on this.
From what I know
Let us take an example, Mr. A is a citizen of India having high networth who is planning his stay across the countries in order to make sure that he is not a resident in anywhere in the world. In a particular year, he stays in India for period of 150 days (assuming that he stays less than 365 days in 4 years immediately preceding year) and remaining days in multiple countries. By virtue of his limited stay in India and other countries, he is not becoming resident in any country. As majority of the countries in the world tax an individual based on residence rule, being a non-resident in every country, such Individual is not liable to tax in any country on residence rule and thereby avoiding significant amount of tax payable to tax authorities.
An individual, being a citizen of India, shall be deemed to be resident in India in any previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature (‘deemed resident’).
In my view, the way you have explained, you will be treated as deemed resident and income will be taxed in India.
Disc: As I said before, I am not an expert so please seek professional advise.