We are Indian citizens aged
66 and 63 years, retired, and living in the US. We have some investments in
India and are filing our income-tax returns regularly. We have a son and a
daughter, both in the US. If one of them shifts to India, we too will go back
there. We do not intend to become NRIs. As we are not earning anything in the
US, can we go on as normal resident Indians for the rest of our
life?

Ashok Gupta

The concepts of citizenship
and status of NRI are different. You will continue to be Indian citizens.
However, the status of resident/ NRI is conferred by law and does not depend
upon the intention of a person. If you spend 182 days or more in India or are in
India for 60 days in the current fiscal and 365 days in the past four years, you
become an Indian resident. You will have to ascertain your status based on
number of days you stay in India, as per the above rules. If you satisfy either
one of the two conditions, you will qualify to be an Indian resident.
Conversely, if both conditions are not being satisfied, you will be NRIs,
whether you intend to earn anything in the US or not.

I
am an Indian citizen by birth and have been living in the US for 11 years.
Recently, I got my US citizenship. I applied for an overseas citizen of India
card and plan to go back to India forever. Could you let me know that once I
start living in India (as a US citizen), do I have to pay taxes in India for
income generated there or would I have to pay taxes in the US as I will be a US
citizen. Also, will it matter for tax purposes if I move to India after or
before completing 182 days in the US (after or before October 2, 2010) for
fiscal 2010-2011?

Hitesh

If you are in India for 182
days or more in any fiscal, you become a tax resident of India, irrespective of
your citizenship. Therefore, once you start living in India and generating
income in India as stated in your query, you will be liable for paying tax in
India. Legally, we can answer queries pertaining only to Indian laws. However
generally, citizens of a country are liable to pay tax on their global
income.

As such, you could be liable
to pay tax on Indian income in the US too, though it would be best if you get
this confirmed by a local tax attorney. If you find you are paying taxes on the
same income in both countries, you can take shelter under the Double Tax
Avoidance Agreement between the US and India. If you come to India after October
1, you would be an NRI even in FY11, by virtue of being in India for less than
182 days in that fiscal.

However, this would help only
in case of your foreign income (which is tax-free for an NRI). Your Indian
income, on the other hand, is taxable irrespective of your status. In other
words, Indian income is equally taxable both for an NRI as well as for a
resident Indian.