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India Tax

Who is Non Resident Indian?
Non-Resident Indian (NRI) is an Indian living outside India. The Term NRI, generally, means a non-resident who is either an Indian Citizen residing outside India and includes foreign citizen of Indian origin residing outside India.

Which NRI income is Taxable in India?
1. Income accrued or to be accrued in India
2. Income sourced from India
3. Income received or to be received in India

Note – Double Taxation Avoidance Agreement works well in favor of NRIs. It is a contract made between India and a number of foreign countries by way of which an NRI can be saved from being taxed in the country of their residence. As an NRI, they are liable to pay taxes if your earnings in India have been more than the exemption limit. You are exempt from filing income tax returns if your income is churned out by long-term investments.

Who needs to file Income tax return?
If you are an NRI, you would have to file your income tax returns if you fulfill either of these conditions:

    • Your taxable income in India during the year was above the basic exemption limit. (for the financial year 2022-23 amount is around Rs. 5 lacs)
  • You have 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.
  • You may also file a tax return if you have to claim a refund. This may happen where the tax deducted at source is more than the actual tax liability. For Instance, suppose your taxable income for the year was below the exemption limits but the bank deducted tax at source on your interest amount, you can claim a refund by filing your tax return.
  • Another instance is when you have a capital loss that can be set-off against capital gains. Tax may have been deducted at source on the capital gains, but you can set-off (or carry forward) capital loss against the gain and lower your actual tax liability. In such cases, you would need to file a tax return.

Note: The enhanced exemption limit for senior citizens and women is applicable only to residents and not to non-residents. There are two exceptions also –

  • If your taxable income consisted only of investment income (interest) and/or capital gains income and if tax has been deducted at source from such income, you do not have to file your tax returns.
  • If you earned long term capital gains from the sale of equity shares or equity mutual funds, you do not have to pay any tax and therefore you do not have to include that in your tax return.
What is the exemption limit for filing India tax return?
The basic exemption limit for financial year 2015-2016 is as under: –
Gender, Age & Residential Status Basic Exemption Limit
Resident Female & Others Rs.2,50,000
Resident Senior Citizen
(Age > = 60 yrs and < 80 yrs as on 31st March of financial year)
Resident Super Senior Citizen
(Age > = 80 yrs as on 31st March of financial year)

You do not need to file an Income Tax Return if your total taxable income does not exceed the basic exemption limit before taking into account deductions, even though you may have a PAN.

Who can file an Income Tax Return ?
Any Individual having the following types of income can opt for filing return

  • Income from salary
  • Income from house property
  • Income from sale of investments (shares, mutual fund units, bonds) or property
  • Income by way of interest, dividend, gifts, family pension, agricultural income
  • Brought forward losses (except loss from activity of owning and maintaining race horses)
  • Clubbing of income

What is the last day of filing the tax return?
The due date of filing income tax return for the financial year 2015-16 is 31st July 2016.

What if I do not file taxes on time?
If an NRI fails to file its income tax return on time, they can still file their return with the following consequences –

  • If you do not have any tax payable (that is all your tax has been deducted at source), you can still file your tax return by 31st March 2017 without any penalties. (so you can even file the return for the financial year 2015-2016 by March 2017 if you have already paid the required taxes without any penalty)
  • If you do have tax payable, you can still file your returns by 31st March 2017 but you will be charged an interest of 1% per month for every month of delay starting from 31st July 2017 till the time you file your tax returns.
  • If you do not file your tax returns even by the 31st of March 2017, you may be charged a penalty of Rs 5,000 after 31st March 2017.
  • Also, one may be subject to the prosecution u/s 276 cc.

Why do I have to files tax return in India?
The updated tax information/records help NRI to comply with the procedural documentation for repatriation of income & assets from India. It also helps him to have ready records as & when he returns to India.

Thus, non-filing of income tax returns will result in interest and penalty. In case there are any losses to be carried forward, the returns need to be filed. Without filing the returns, the losses cannot be carried forward for set-off against subsequent year’s incomes.

Can you help us in filing taxes in India?
Yes. We can help you to file taxes in India. Please fill up the attached form and email it to us at indiainfo@workmytaxes.com

We just need your personal details as well as income details to file income tax return in India. We offer excellent tax support in addition to filing of return of income and comprehensive tax planning. After which we take care of online tax return filing in most hassle free manner, making online income tax filing an excellent experience.

Student Visa (F1) and Non Resident Alien in USA

What If I am a student in USA (on F1 visa), and have some income and do not have any income in India?
If you are on F1 visa/OPT in USA, then you are Non-resident in USA. In that case for tax purpose you tax home is India. So you need to file USA as well as India taxes. But whatever taxes you paid in USA, you get tax credit for it in India to avoid double taxation.

What If I was on work visa in USA and stayed less than 183 days?
In this situation, your tax home will be India as a resident of India and you need to file taxes In India as well. But whatever taxes you paid in USA, you get tax credit for it in India to avoid double taxation.

Tax Deducted at Source

How do I know that some Tax is deducted at source from Income in India or what are my tax credits for filing taxes in India?
You can do it by downloading form 26AS from the tax return. Form 26AS contains: Details of tax deducted on behalf of the taxpayer by deductors, Details of tax collected on behalf of the taxpayer by collectors, advance tax/self-assessment tax/regular assessment tax, etc. deposited by the taxpayers, details of paid refund received during the financial year, Details of the high value transactions in respect of shares, mutual fund etc.

How can I download the 26AS form? Is it available online?
You can access your Form 26AS in several ways. You can view the form on the Income Tax website. You must register at the portal and click on ‘View Tax Credit Statement (From 26AS)’ in “My Account”. The facility is available free of cost.

Alternately, you can view the form through your bank using net banking facility. The Income Tax department has authorized some banks for this purpose. You can find a list here. The facility is available for free of cost.

You can also access the form through the TRACES website.

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