A Few Important things an NRI should know before filing IT returns in India:
Normally a non–resident Indian’s income, earned abroad, is not subject to income tax in India. But, if an NRI has some income source in India (which is his/her aboriginal country) and this income crosses the basic limit of exemption that is Rs.2 lakh, then the NRI needs to file income tax return in India.
Normally a non–resident Indian’s income, earned abroad, is not subject to income tax in India. But, if an NRI has some income source in India (which is his/her aboriginal country) and this income crosses the basic limit of exemption that is Rs.2 lakh, then the NRI needs to file income tax return in India.
This income may come from different sources such as income from house rent or interest on fixed deposits. Apart from the aforesaid income sources, if an NRI transacts in shares or mutual funds in India, the profit that he/she receives from such transactions is also subject to income tax in India. Every year, 31st July is the date by which NRIs have to file income tax returns in India.
What an NRI should be aware of before filing income tax returns in India:
What an NRI should be aware of before filing income tax returns in India:
When to file returns:
NRIs need to file income tax returns in India when their total income in India goes beyond the standard taxable limit of Rs.2 lakh per annum. If the tax deducted at the source is higher than the payable amount, NRIs can apply for refund.
Documents required:
To file income tax returns in India, an NRI needs the following documents – a valid passport to prove his/her stay outside India, statement of his/her demat account as proof of bank transactions done in India, and TDS certificates.
Deductions and Exemptions:
In certain cases, NRIs can apply for tax exemptions in India. This helps reduce taxable income. They can apply for tax exemptions under the section 80c of the Income Tax Act if they have certain investments such as housing loans. However, there are certain exemptions which do not apply to NRIs. For example, they cannot avail differential exemption limits based on gender and age. This is applicable to Indian residents only. Besides, short-term or long-term capital gains received by an NRI from sale of investments in India does qualify for income tax exemptions.
Alternative ways to file Tax:
There are many alternative means of filing income tax in India. NRIs can take advantage of one of the most convenient modes i.e. filing their income tax returns online through the online portal of the Income Tax Department of India. They can also use private portals or take the help of private tax advisers to do the same.
Type of income:
This is an important points to remember. It is not mandatory for an NRI to file income tax returns in India if the total income during the relevant financial year consists only of investment income or long-term capital earnings or both. In such cases, tax is usually deducted at source for such income.
Refunds:
In order to ensure you get a full refund of taxes, when it is due to you, ensure you provide complete bank account details, including your account number, IFSC code & MICR code, correctly in the portal. If you apply for your tax refund electronically, then the processing of your refund will also happen electronically.
To file income tax returns in India, an NRI needs the following documents – a valid passport to prove his/her stay outside India, statement of his/her demat account as proof of bank transactions done in India, and TDS certificates.
In certain cases, NRIs can apply for tax exemptions in India. This helps reduce taxable income. They can apply for tax exemptions under the section 80c of the Income Tax Act if they have certain investments such as housing loans. However, there are certain exemptions which do not apply to NRIs. For example, they cannot avail differential exemption limits based on gender and age. This is applicable to Indian residents only. Besides, short-term or long-term capital gains received by an NRI from sale of investments in India does qualify for income tax exemptions.
There are many alternative means of filing income tax in India. NRIs can take advantage of one of the most convenient modes i.e. filing their income tax returns online through the online portal of the Income Tax Department of India. They can also use private portals or take the help of private tax advisers to do the same.
This is an important points to remember. It is not mandatory for an NRI to file income tax returns in India if the total income during the relevant financial year consists only of investment income or long-term capital earnings or both. In such cases, tax is usually deducted at source for such income.
In order to ensure you get a full refund of taxes, when it is due to you, ensure you provide complete bank account details, including your account number, IFSC code & MICR code, correctly in the portal. If you apply for your tax refund electronically, then the processing of your refund will also happen electronically.
