Non-resident Indians (NRIs) are taxed in India on their income that is earned or accrued in India. NRIs are also taxed on certain capital gains, such as the sale of property in India. NRIs are not taxed on income earned outside of India, unless it is deemed to be accrued or deemed to have arisen in India.
Income earned in India by NRIs is taxed at the same rates as resident Indians. NRIs are also subject to tax on income that is deemed to accrue or arise in India, even if it is earned outside of India. This includes income from business operations in India, as well as certain types of capital gains, such as the sale of a property in India.
NRIs are also required to file an income tax return in India if their total income, including income earned in India and abroad, exceeds the basic exemption limit for the financial year. The basic exemption limit for NRIs is currently INR 2,50,000 (about USD 3,400) for the financial year 2021-2022.
It is important for NRIs to be aware of their tax obligations in India and to ensure that they are in compliance with the tax laws in order to avoid any penalties or fines. It may be helpful to seek the advice of a tax professional or financial advisor to ensure that your tax affairs are in order.
Benefit of filing ITR to NRI in India
There are several benefits of filing ITR (Income Tax Return) for NRIs (Non-Resident Indians) in India:
- Legal requirement: Filing ITR is a legal requirement for NRIs in India, as per the Income Tax Act, 1961. Non-filing of ITR can result in penalties and fines.
- Avoids tax evasion: Filing ITR helps NRIs to avoid tax evasion, as it helps them to report their income and pay the applicable tax.
- Maintains records: Filing ITR helps NRIs to maintain records of their income, which can be useful while applying for loans, visas, and other purposes.
- Claim refunds: NRIs who have paid more tax than the required amount can claim a refund by filing ITR.
- Credit for future: Filing ITR can help NRIs to get credit for future tax savings, as they can claim deductions and exemptions on their income.
- Shows financial stability: Filing ITR can help NRIs to demonstrate financial stability, which can be useful while applying for loans and other financial instruments.
NRI income tax return due date
In India, the due date for filing income tax returns (ITR) for non-resident Indians (NRIs) is usually July 31 of the assessment year, which is the year following the financial year in which the income was earned. For example, for the financial year 2021-2022, the assessment year would be 2022-2023 and the due date for filing the ITR would be July 31, 2022.
However, it is important to note that the due date for filing ITR may be extended in certain circumstances, such as if the taxpayer is required to get their accounts audited or in some other cases which government may notify time to time.
It is also worth noting that NRIs are required to file an ITR in India if their total income from all sources in India exceeds the basic exemption limit for the financial year. The basic exemption limit for the financial year 2021-2022 is Rs. 2,50,000 for individuals who are below the age of 60 years and Rs. 3,00,000 for individuals who are 60 years or above but below the age of 80 years. The basic exemption limit for individuals who are 80 years or above is Rs. 5,00,000.
Documents required for filing ITR by NRI
There are several documents that an NRI (Non-Resident Indian) needs to submit while filing their ITR (Income Tax Return). Some of these documents include:
- PAN (Permanent Account Number) Card: This is a mandatory document required for filing ITR.
- Passport: This is required to verify the identity and nationality of the NRI.
- Salary slips and Form 16: These documents are required to provide details of the NRI’s salary income.
- Bank account details: The NRI needs to provide details of their Indian bank account where their tax refund will be credited.
- Details of investments: Any investment made by the NRI in India, such as mutual funds, fixed deposits, etc., needs to be declared in the ITR.
- Receipts of tax payments: The NRI needs to provide receipts of any tax payments made during the financial year.
- Details of foreign bank accounts and investments: If the NRI has any foreign bank accounts or investments, they need to provide details of these in the ITR.
- Rent receipts: If the NRI has received any rent from their property in India, they need to provide receipts of the same.
- Details of any property owned in India: If the NRI owns any property in India, they need to provide details of the same in the ITR.
- Other documents: Depending on the specific circumstances of the NRI, they may also be required to submit other documents, such as TDS (Tax Deducted at Source) certificates, details of agricultural income, etc.
It is important for NRIs to stay up to date with their tax obligations in India and to seek the assistance of a professional tax advisor if needed. Failing to comply with Indian tax laws can result in penalties and fines.
