An Indian is considered an NRI if he/she has spent a certain amount of time abroad, while subsequently being absent from India. A resident may attain status of an NRI by staying more than 182 days abroad. The law also states that a person is a ‘resident’, if he has been in India for more than 60 days in a year and 365 days during 4 years prior to that year.

Rules and Regulations.

Income Earned outside India is Taxable…

Being a non-resident Indian (NRI), if any income is accrued in India, it is taxable. The income will be taxed as per fixed slab rate. Following are types of income that are taxable:

  1. Salary income
    Despite being an NRI, if any salary is paid in regards to any service provided in India, it shall be taxable. Further, if the employer of NRI is Indian government along with being the citizen of the country, and if any income is accrued by providing services outside the country, it will be taxable too.
  2. Income from residential property
    Being an NRI, if you have a property situated in India and are earning an income, it is taxable. The calculation of this income is similar to that of a resident’s
    Also, if there is a tenant, whether he is paying the rent in Indian account or the one situated abroad, there is eligibility for tenant to deduct 30% as TDS.
  3. Income accrued from other sources:
    Income from other sources includes income from savings accounts and fixed deposits held in banks situated in India. Such incomes are taxable as per the law. Also, in case of a business or profession set up in India and income earned from it will be then taxable accordingly.

Just like residents, even NRIs are entitled to claim exemptions and deductions from their income. Some of them are mentioned below:

Deductions under Section 80C

NRIs can claim a deduction under Section 80C from the total income. These deductions include:

  • Life Insurance premium payment
  • Children's tuition fee
  • Principal repayments on house loan
  • Unit-linked insurance plans (ULIPS)
  • ELSS investments

We at TaxAvtaar can help you in the following areas:

  • Allotment of PAN number in India
  • Assistance in changes of directors, shareholders, addresses, and office details Filing of Annual Tax Returns on behalf
  • Maintenance of statutory books
  • Advsiory & Computation of Capital Gains on Sale of Immovable Property/Savings
  • Approvals for Lower Rate of TDS on Sale of Immovable Property & Assets.

Procedure for Income Tax Return of NRI's.

Our procedure for ITR is completed in the following stages:

  1. Once documents are received from the taxpayer's end, our proficient team reviews the documents.
  2. After reviewing, we calculate and check for basic computation of income of any manner. In addition to the same, we might state that whether there is need of any other document or not for further calculations.
  3. After computation of income and discussing the same with taxpayer, our team files ITR with the IT department await its processing by Income Tax Department.
  4. Once the Income Tax Returns is filed and upon Successful processing of ITR, our team communicates the complete status of your ITR and also state if there is any refund processing of ITR.

Timely Assistance:-

Our expert team is completely time bound which prepares and files Income Tax Return in time.

In case if the NRI's income is taxable in India as well as abroad, then benefit of Double Taxation Avoidance Agreement (DTAA) can be claimed. Relief under the DTAA is available depending on the type of income (income may be entirely exempted, or may be taxable at a lower rate).
If the income is taxable even under the DTAA, NRIs need to pay tax in India and claim the credit of such taxes paid against the tax liability in their country of residence subject to some conditions. For claiming relief, Tax Residency Certificate (TRC) of the country where NRI is tax resident, is necessary.

Exempt income details

In case if there is income of any of the following types:

  • Interest,
  • Dividends on FCNR/NRE deposit,
  • Long-term capital gains on listed securities,
  • Eligible gifts received
  • Interest on tax-free bonds etc.

Which is exempted or even though it has no tax impact under the schedule of Exempt Income, it needs to be reports specifically.

Admission of bank account details

If any NRIs, who have not claimed any refund, or NRIs who have claimed any refund but have a bank account in India, are not required to furnish details of their foreign bank account in the return of income. However, NRIs who who have claimed any income-tax refund and does not hold a bank account in India may furnish details of one foreign bank account for the issuance of the refund.

Verification of ITR

After the uploading of ITR, it should be verified within 120 days. Returns which are not verified will be considered as invalid or defective in nature and a notice might be issued if any discrepancy is observed during verification of ITR.

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