NRI Tax Return Filing- Some points to be kept in mind

 NRI Tax Return Filing

 

Whether obligation of Income Tax Return Filing is only on the Residents or whether Nonresidents are also required to their tax return in India? This is a question which comes in the mind of many individuals.

 

As per the provisions of the Income Tax Act, 1961 ( the Act) every person having taxable income in excess of prescribed amount is required to prepare and file his or her income tax return on or before the due dates prescribed under the act.

 

Therefore, the obligation of tax return filing is on both the residents as well as non residents. In this write up, we would be discussing about NRI Tax Return filing in India.

 


Following points shall be kept in mind before filing income tax returns in case of NRIs:

 

a)     Determination of Residential status

 

Unlike residents, whose income earned in India as well as outside India is taxable in India, in case of nonresidents, only income earned in India is taxable and income earned outside India is not taxable in India.

 

b)    Choosing right income tax return form

 

Income tax return form of nonresidents are different from those residents, accordingly, return should be filed in correct ITR form.

 

c)     Provisions of both domestic law as well as Double Tax Avoidance Treaty shall be kept in mind while computing tax liability and filing Income Tax return.

 

d)    There are certain incomes of NRIs which are not taxable in India like

 

-         Any income which is earned outside India

-         Any interest received on NRE account deposit

-         Investment in foreign currency is taxed at concessional rate

-         Any assets received as gift in India or as inheritance

e)     In following situations, NRIs shall file their Income Tax Return (ITR) in India

 

-         In case of taxable income more than Rs 2.5 lac

-         In case of any refund due

-         In case of any gain or loss on sale purchase of shares or properties

-         In case of any losses to be carried forward

 

 

Due date for NRI Tax return filing

 

Like residents, the due date for filing the Income tax return of NRIs is 31st July following the end of every fiscal year. Filing of returns by electronic mode is mandatory in cases where the taxable income exceeds INR 500,000.There is no system of joint filing of tax return with spouse.

 

List of documents required for filing Income Tax return by NRIs

 

Following documents are required for filing NRI Tax Return:

 

Copy of PAN, Passport and Aadhar Card

Copies of all the Bank Statement of all the banks maintained for FY

Copy of salary certificate or Form 16/16A or salary slips

For determining the residential status, details of stay in India in last 1 year, last 4 years, last 7 years and last 10 years

Details of any foreign income earned outside India

Details of investment u/s 80C in PF, LIC, mutual fund, PPF

Tax identification number in the foreign country

Any other income in India

Income tax portal Login password

 

Above points shall be kept in mind while filing NRI Tax return for FY 2021-22 which will commence in the month of May 2022

Location: India

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