In this article, we shall discuss the important points to consider while filing the Income Tax Return for Non resident Indians (‘NRI’).

Following points shall be discussed in the article:

I. CRITERIA FOR FILING INCOME TAX RETURN

II. INCOME CHARGEABLE TO TAX IN INDIA FOR NRI

III. TREATMENT OF EXEMPT INCOME FOR SLAB CALCULATION

IV. TREATMENT OF DEDUCTIONS FOR SLAB CALCULATION

V. THRESHOLD LEVELS OF INCOME FOR NRI SENIOR CITIZEN

VI. BENEFITS OF FILING TAX RETURN

VII. SPECIAL PROVISIONS FOR NON FILING OF RETURNS BY NRI

The above points shall be discussed in detail as follows:

Income-Tax-Provisions-Applicable-on-Non-Residents-for-Filing-Returns-In-India

I. CRITERIA FOR FILING INCOME TAX RETURN

  • If taxable Income in India is more than INR 2.5 Lakhs in a FY

OR

  • Aggregate deposits of more than INR 1 Crore in one or more current account in a FY

OR

  • Incurred electricity expenses of INR 1 lakh in a FY

In the above cases, Income Tax return filing is mandatory for NRIs.

II. INCOME CHARGEABLE TO TAX IN INDIA FOR NRI

Following Incomes shall be chargeable to tax for NRIs in India:

  • Salary received in India
  • Income from business or Profession in India
  • Rental & Lease income earned in India
  • Dividend Income from Shares in India
  • Interest Income earned in India
  • Capital gains from Sale of Shares/Mutual Funds

III. TREATMENT OF EXEMPT INCOME FOR SLAB CALCULATION

  • Exempt income not to be clubbed
  • Interest Income from FCNR/NRE not to be clubbed
  • All exemptions to NRI notified not to be clubbed

IV. TREATMENT OF DEDUCTIONS FOR SLAB CALCULATION

  • Threshold limit of Rs. 2.5 Lakhs is before applying for eligible deductions
  • Eligible Tax deductions apply only when you file Tax returns

V. THRESHOLD LEVELS OF INCOME FOR NRI SENIOR CITIZEN

  • Threshold limit of INR 2.5 Lakhs applies to all category of NRI Senior Citizen
  • No special Slab relaxations to any category of NRI Senior Citizen

VI. BENEFITS OF FILING TAX RETURN

  • TDS deducted by the deductors can be claimed in the return
  • Losses can be carried forward.
  • Tax Status can be proved in India
  • Can claim exemptions under DTAA
  • Refund (if any) can be claimed by filing the return.

VII. SPECIAL PROVISIONS FOR NON FILING OF RETURNS BY NRI

Conditions to be fulfilled

  • Non Resident Indian
  • Income consisting of only

> Investment Income

> LTCG

> Both

  • TDS has been deducted on such income

*****

About the Author : Author is CA Vidhu Duggal helping in advisory on domestic & International taxation issues. She is also founder of Vidhu Duggal & Company. Chartered Accountants, a Chartered Accountancy firm with its head office at New Delhi and can be reached at [email protected] or +91-9268747482.

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