Income Tax Filing & Non-resident Indians

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Income Tax Filing & Non-resident Indians


NRIs also known as Non-resident Indians are entitled to settle taxes for their incomes according to the Indian tax regime for the revenue they earn during their stay in the country. Some of the criteria and procedures involved to file for income returns for NRIs and should be made familiar are as follows.

  • Keep a Tab on Residential position in the country
  • Declare revenue and taxes in advance
  • Be Mindful of Chargeable Revenues
  • Keep an Account of Tariff Obligation
  • Have a Good Knowledge of Double Taxation Treaty Benefit (DTAA)
  • Know the ITR Divisions
  • Be Informed on Excluded Revenue Information
  • Admittance of Financial Information
  • Specifics to be Aware off for Valuables and Obligation in ITR
  • Be Sure to Authenticate the ITR

Keep a Tab on Residential Position in the Country

It is mandatory for non-residents to constantly keep a tab on their living status in India end of each fiscal year. This is however, largely relied on the days resided in the country by the non-resident according to Section 6 of the Income Tax Act 1961 (IT Act).


Declare revenue and taxes in advance

It is good for non-residents to declare beforehand the tariff paid or the TDS credited in the tax return filing process, as emulated on Form 26AS.


Chargeable Revenue To be Mindful Off

Some of the revenues that attract tax payments for NRIs are gains or interests acquired from current bank accounts retained in the country, financial assets or bonus acquired from stakes in India, rental tariff from real estate investments or land ownership in the nation etc. Additionally, there are some revenues which will incur duty fees, for instance, reductions under section 80C.


Keep an Account of Tariff Obligation

Taxation risks are decided on the grounds of estimated slab rates suitable to a particular individual. Therefore, tax liabilities differ from person to person. However, the essential privilege limit for every NRI is around Rs.2.5 lakhs, prior to reductions or exemptions.


Have a Good Knowledge of Double Taxation Treaty Benefit (DTAA)

If an NRI’s revenue is found to be taxable in the country as well as abroad, compensation can be declared according to the Double Taxation Avoidance Agreement (DTAA) . Relaxation under the DTAA is granted banking on the kind of revenue earned.

If the revenue happens to be taxable even after declaring DTAA, one requires to make tariff payment in India and petition for the credit of such duty paid versus the tax liability in their country of residence under certain stipulated conditions.


Know the ITR Divisions

Non-resident Indians are now obligated to file for returns in ITR-2 from financial year (FY) 2017-18. For those who earn and have business incomes, taxes should be filed under ITR-3. If ITR 1 is not available for the non-residents, Aadhar number doesn’t have to be quoted for ITR filing.


Be Informed on Excluded Revenues

As an NRI it is important to declare absolved revenues such as gains from interests, dividends on FCNR/NRE investments, long period capital benefits on catalogued guarantees, qualified allowances collected, gains on duty-free bonds etc. though these do not incur tax fees according to Exempt Income protocols.


Admittance of Financial Information

As an NRI who has no intentions of applying for a compensation, or if in any case looking to apply for a refund but possess an active bank account in the country, then you are not obligated to show proof of your foreign bank account while filing for your income tax returns. On the contrary, NRIs who do not have an Indian account will be required to provide details of the foreign bank account while applying for the refund.


Specifics to be Aware off for Valuables and Obligation in ITR

According to Schedule of Assets & liabilities NRIs who have a turnover of Rs. 50 lakhs or more, are required to declare the specifics of their movable and immovable assets possessed in the country and its equal liabilities while filing for the income tax returns.


Be Sure to Authenticate the Income Tax Returns

Once the ITR is filed, the same should be confirmed and verified within a span of four months. Failure to do so will result in your filing getting rejected. However, to help NRIs verify their ITR filing at ease, an e-verification option is available which can be activated through a net banking account. For those who wish to verify physically, an ITR signed and acknowledged to the Income-Tax CPC, Bengaluru is accepted.

Read this article to know all about Income Tax Returns in India.

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