Do NRIs need to file Return of income in India? – A Detailed Guide
Do NRIs need to file Return of income in India?. As per the provisions of income tax act 1961, In case of an NRI, only income accruing in India or received in India or deemed to accrue in India is taxable in India, unlike in the case of a resident, whose worldwide income is taxable in India. As an NRI one may be getting some income in India and may be ignoring about income tax part. Here I’m discussing some important points to be considered by an NRI about his taxation matters. Now you can scroll down below and check complete details regarding “Do NRIs need to file Return of income in India?”
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Do NRIs need to file Return of income in India?
As an NRI one may be getting some income in India and may be ignoring about income tax part. Here I’m discussing some important points to be considered by an NRI about his taxation matters.
Generally in case of salaried employees working in abroad, one opens a bank account abroad in which the salary is first deposited before being remitted to India.
(1) First of all one should determine his residential status as per the provisions stated in income tax act 1961.
(2) As an NRI one should file income tax return in India if any one of the following conditions is satisfied.
(a) Total taxable income > Basic exemption limit (2.5L) :
If an NRI, has earned income in India and total taxable income exceeds Rs 2.5 Lakhs, then he/she needs to file ITR in India.
(b) Capital Gains in India :
One has earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit. In such case he needs to file the return of income.
(3) If one wants to claim Income tax refund
If the NRI wants to claim IT refund, then they need to file income tax returns in India.
(4) If the NRI has losses that he needs to carry forward then he should file his return of income.
1) The benefit of differential basic exemption limit is not applicable to NRIs., NRIs do not have special exemption limits available for Senior Citizens or Women for resident Indians. All NRI’s would be treated as common and same exemption limit applies.
2) Even though the income of the NRI during the year does not exceed basis exemption limit and has some capital gain income then he/she has to file income tax return.
3) If TAX is already deducted by the payer in the form of TDS in respect of any income on investment like interest or any capital gain then it’s not required to file ITR.
4) Which ITR is applicable to NRI :
(1) ITR 1 : If an NRI has Interest Income only .
(2) ITR 2 : If NRI has Income from Capital Gains.