Guide for NRI to file Income Tax Return
Oct 19, 2016 Legal Guidance
The questions that hit the mind of an NRI when it comes to income tax return is: “Why should I pay Income Tax in India?” ;“ If yes, by which date?”; “ Shall I get some relaxation?” Well, all such queries shall be discussed in this article.
Do NRIs need to file taxes?
Quoting Vaibhav Sankla, Director, H&R Block India---- “Under the Indian tax laws, the taxability of your foreign income depends on your residential status. Your earning outside India will get taxed only if you qualify to be resident or ordinary resident of India.” in a particular financial year. Moreover, if an NRI has any income that has been “earned in India”, then he/she has to file income tax returns within the due dates (31st of July for individuals in general). In terms of IT, “incomes earned in India” means income made by an NRI in India or income received in India on his/her behalf that has been earned by him/her in some way or income that accrues or arises in India that has also been earned in India.
Shall NRIs get some tax relaxations?
It is mandatory for an NRI to file income tax returns in India if his/her gross annual income acquired in India, through salary, enterprise and/or investment is more than Rs.2,50,000 within an entire financial year. Only after filing an Income Tax file, an NRI can claim for a refund.
It is also to be kept in mind that : as per Double Taxation Avoidance Agreement (DTAA) a fixed deposit in Indian bank for an NRI would be taxed at a lower rate.
If an NRI possesses house properties in India he/she must file income tax return even if the house is not rented out. This is because only one house would be exempted from tax, but the other houses would be deemed taxable.
If an NRI inherits a property from his parents and decides to sell it, the income from this property would be considered taxable. Therefore, income tax return has to be filed.
An NRI does not have to pay long term capital gains from the sale of equity shares or equity mutual funds.
For NRIs whose the only source of income in India is through the interests or capital gains earned through certain investments does not have to file income tax return, if his/her TDS has been already deducted.
Lastly, Archit Gupta, Founder and CEO, cleartax.com opines: “ As long as your incomes in India are within Rs. 2,00,000, you are not required to file an IT Return”. He has also added that an NRI can deposit up to Rs.1,00,000 in his Indian account in order to pay for his ongoing health insurance, health expenses of his parents or to pay home loan instalments without making an IT file.
Therefore, knowledge of these rules and regulations will invariably benefit you a lot if you are an NRI.
Do NRIs need to file taxes?
Quoting Vaibhav Sankla, Director, H&R Block India---- “Under the Indian tax laws, the taxability of your foreign income depends on your residential status. Your earning outside India will get taxed only if you qualify to be resident or ordinary resident of India.” in a particular financial year. Moreover, if an NRI has any income that has been “earned in India”, then he/she has to file income tax returns within the due dates (31st of July for individuals in general). In terms of IT, “incomes earned in India” means income made by an NRI in India or income received in India on his/her behalf that has been earned by him/her in some way or income that accrues or arises in India that has also been earned in India.
Shall NRIs get some tax relaxations?
It is mandatory for an NRI to file income tax returns in India if his/her gross annual income acquired in India, through salary, enterprise and/or investment is more than Rs.2,50,000 within an entire financial year. Only after filing an Income Tax file, an NRI can claim for a refund.
It is also to be kept in mind that : as per Double Taxation Avoidance Agreement (DTAA) a fixed deposit in Indian bank for an NRI would be taxed at a lower rate.
If an NRI possesses house properties in India he/she must file income tax return even if the house is not rented out. This is because only one house would be exempted from tax, but the other houses would be deemed taxable.
If an NRI inherits a property from his parents and decides to sell it, the income from this property would be considered taxable. Therefore, income tax return has to be filed.
An NRI does not have to pay long term capital gains from the sale of equity shares or equity mutual funds.
For NRIs whose the only source of income in India is through the interests or capital gains earned through certain investments does not have to file income tax return, if his/her TDS has been already deducted.
Lastly, Archit Gupta, Founder and CEO, cleartax.com opines: “ As long as your incomes in India are within Rs. 2,00,000, you are not required to file an IT Return”. He has also added that an NRI can deposit up to Rs.1,00,000 in his Indian account in order to pay for his ongoing health insurance, health expenses of his parents or to pay home loan instalments without making an IT file.
Therefore, knowledge of these rules and regulations will invariably benefit you a lot if you are an NRI.
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