Non Resident Income Filing (NRI)

If you are NRI. Your total Income in India is more than ₹2.50 lakh in a financial year, you want to claim refund of TDS, or Property sold in India etc.

Taxability of your Income is decided based upon your residential status. Your residential status for Income Tax purposes is based on the number of days you spend within India. If you are a foreign national living within India, you may be considered a ‘Resident Indian’ for tax purposes, and similarly if you are an Indian living abroad, you might be considered a Non-Resident Indian (NRI).

Residential status will be NRI:
If you were in India for less than 182 days & you leave India for following purpose:
1.Leave India for employment purpose
2.You are crew member of the Indian ship & left India
3.Person of Indian origin visiting India

An NRI, like any other individual taxpayer, must file his return of income in India if his gross total income received in India exceeds ₹ 2.5 Lakhs for any given financial year or to claim TDS refund.

Due date for filing return for an NRI is 31 July of the assessment year.

Till end of FY 2019-20, NRIs (covers Indian citizens and Persons of Indian Origin) included those individuals who visited India for less than 182 days in a financial year. 

In February 2020, the Budget 2020 proposed to reduce this period to 120 days for all NRIs. The reduced period of 120 days shall apply, only in cases where the total Indian income (i.e., income accruing in India) of such visiting individuals during the financial year is more than ₹ 15 Lakh.

Following Income of NRI is taxable in India:

1. 1. Income received or deemed to be received in India
   2. Income which accrues or arise or is deemed to accrues or arise in India

Therefore, your income from any country outside India is not taxable in India.

No, as Income tax return can be filed & e verified from anywhere.

Yes, if your tax liability exceeds ₹10,000 for a particular financial year, then you are liable to pay advance tax. Advance tax due date for NRI is same as due date for Individual resident in India.

Income tax slab rate for NRIs is same as Slab rate for individuals. However, NRIs do not get slab benefit for senior and super senior citizens.

Yes NRI can claim following 80C deductions-

• • Principal repayment of housing loan
  • Tuition Fees of maximum two children
  • Premium on Life Insurance Policies
  • Investment in ELSS
  • Term deposit of not less than five years.

NRI cannot claim followings 80C deductions-

• • Investment in Public Provident fund (PPF) (Not allowed opening a new PPF account.)
  • Investment in National Saving Certificate (NSC)
  • Post Office 5 year Deposit scheme
  • Senior citizen savings scheme

Section 80D: Deduction in respect of health/medical premium paid. Maximum deduction allowed is ₹25,000 in case of self, spouse and children (dependent). Also please note that the limit of ₹50,000 in case of Senior citizen will not be allowed for Non Resident Individual. For Senior citizen also maximum deduction allowed will be ₹25,000 only.

Section 80E: NRI can claim deduction of Interest paid on education loan for maximum period of 8 years.

Section 80TTA: deduction is allowed for saving account interest upto ₹10,000/- but 80TTB is not applicable to NRI.

Section 80G: NRI can claim deduction of donation made to institution registered u/s 80G.

NRE stands for (Non-Resident External) Account is a savings account maintained in Rupees where you invest your foreign income earned outside India.

You cannot convert resident account in India to NRE account, for NRE you have to open new account.

The interest earned on NRE account is tax-free and continues to be exempt for two years after the individual returns to India.

As per FEMA regulations, as and when you become a NRI, you need to convert your resident savings bank account to a Non Resident Ordinary (NRO) account. It’s ILLEGAL to hold savings bank account for NRIs.

In NRO account one can deposit in foreign as well as Indian currency, and withdraw in Indian currency. Interest Income of NRO account is taxable @30%.

Interest earned on NRE fixed deposit is tax-free in India. However, Interest from FD in NRO account taxable in hands of NRI.

File your Income tax return for claiming of refund of TDS.

Yes, capital assets sold by NRI  in India is taxable under capital gain head, & Inherited property sold is also taxable to capital gain tax.

You can repatriate the sales consideration of property sold in India through NRO account & can only transfer money out of India after paying all taxes & getting a certified (Form 15CB) from Chartered Accountant, also NRI has to file & submit Form 15CA.

Taxability for sale of listed shares in India is same as applicable for resident in India.

Rent Income earned from house property situated in India is taxable under House Property head, as it is accrued in India.

As per Income tax act, tenant is required to deduct TDS u/s 195 @31.20% including cess & surcharge as applicable, therefore for claiming refund of TDS, NRI is required to file ITR.

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