NRIs must convert all their resident bank accounts to non-resident (ordinary) , or NRO, or non-resident external, or NRE, bank accounts.
I am a non-resident Indian (NRI). I have an NRI account in India, in which I keep my savings. From this account, I transfer a fixed amount every month to a joint account with my family member or spouse. My family member or spouse has no income source of her own. Will income tax be applicable on this savings account? Should I file tax returns?
There is no tax liability for you or for your wife or family member for transferring money from one account to another, as long as your wife or family member does not invest your money on your behalf. Non resident Indians must convert all their resident bank accounts to nonresident (ordinary) or NRO or nonresident external or NRE account. Also, any interest income earned from a bank account (except interest from NRE account which is tax-free) shall be included in the income tax return of the first holder of the account. An NRI must file tax return in India, if income from India exceeds Rs2.5 lakh in a particular financial year.
Firstly you must check properly your residential status in India for FY18. To be a resident of India for tax purposes, you must meet one of the conditions and both additional conditions.
Conditions: You are in India for 182 days or more in the financial year (FY); or you are in India for 60 days or more in the Financial Year and 365 days or more in the four Financial Years immediately preceding the relevant Financial Year.
You are a resident in India in two of the 10 Financial Years immediately preceding the relevant Financial Year; and you are in India in the 7 years immediately preceding the relevant FY for 729 days or more.
If you do not meet any of the first set of conditions you would be an NRI. Since you have been in India post July 2017 you are likely to be resident in India. However, you do not meet any of the additional conditions, so your status will be resident but not ordinarily resident in India (RNOR).
In this situation you must pay tax on income earned from India. In case this salary is paid to you in your Indian account, you must include it in your tax return in India. By taking benefit of the Double Taxation Avoidance Agreement between the two countries, you can avoid paying tax on the same income twice. However, if this salary has been received in the foriegn country, you do not have to show it in your tax return of India.a