Nri status change

My friend got a job in Uk in 2000. He did not changed his residential status in income tax and banks. In 2007 he got pan card as indian resident and also opened a share trading account with his indian money. His mother duely gifted him some shares. By trading through these shares he earned indian income in 2012 and properly filed his audited tax return. Now he has received a querry(not scrutiny) about the transactions, other source of income and all personal details. During the entire period no funds were transferred to or received from UK. Accounts are all clean and due taxes have been paid.

Now at this stage should he declare his PIO status and inform RBI and opt for PIS scheme? Is there any serious violation?


Lets make one concept clear. If a person has lived abroad for job for more than 182 days in a f.y. he is an NRI for that year come what may. Whether you kept using your trading demat and savings account as an ordinary resident does not matter. Since you got the shares as gift when he was already a non resident he is in violation of FEM Act. Only those who possess shares while being residents can continue to hold on to those shares.

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