TaxTMI 
TaxTMI 
Query Regarding ITR 3 for NRI's
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....uery Regarding ITR 3 for NRI's <br> Query (Issue) Started By: - Vineet Kumar Dated:- 11-8-2026 Income Tax <br> Got 2 Replies <br> Income Tax<br> <br> I am an Indian citizen who lived and worked in the US from Apr-2021 to 6-Feb-2026. I returned to India on 6-Feb-2026 and my residential status for FY 2025-26 remains Non-Resident (NRI) based on the number of days stayed in India. After returning, I s....
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....tarted working as a freelance software consultant / sole proprietor for a US client. I provide software development/technical consultancy services remotely from India, work from my residence, have no employees or separate commercial office, and receive payment in USD. I am GST registered and export services under LUT. The professional income is being offered to tax in India through ITR-3. While fi....
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....ling ITR-3 for AY 2026-27, Part A-General asks: "In case of non-resident, is there a permanent establishment (PE) in India?" Should I select Yes or No? Section 92F defines PE to include a fixed place of business through which business is wholly or partly carried on. However, the India-US DTAA also uses the concept of a "fixed base" for independent professional services. Does working as an NRI sole....
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.... proprietor/freelancer from my home in India constitute a PE for this specific ITR-3 disclosure? Or is this question mainly intended for foreign enterprises/non-residents operating in India through a branch, office, agent, etc.? --Reply By: Sanjeev Agarwal The Reply: On the facts stated, I would not treat "working from an Indian residence" as automatically establishing a PE, nor would I say tha....
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....t an individual sole proprietor can never have a PE. The answer requires examining the applicable PE definition, the scope of the ITR-3 disclosure, and, where relevant, the India-US DTAA provisions relating to PE/fixed base. The facts that the consultancy is actually and continuously carried on from a particular Indian residence make a PE argument possible, but the conclusion should not be based m....
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....erely on the existence of a home office. The treaty-residence position and the precise legal basis for applying the PE concept to the ITR disclosure also need to be established. Accordingly, on the limited facts available, I would regard the issue as fact-sensitive rather than give an unqualified YES/NO. --- Sub-Reply By: Vineet Kumar The Sub-Reply: Thanks Sanjeev. But, what other facts will he....
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....lp in arriving at the correct answer? I am reporting myself as an NRI in ITR-3. I will also be reporting income earned from my freelancer work. I am maintaining books of account. <br>***<br> Discussion Forum - Knowledge Sharing....