NRI Income Tax Return Filing

NRIs will have to pay income tax on the income that they have earned in India. NRIs will also require to pay their taxes on the income that is predicted to accrue or arise within India. The money that is received or deemed to be accepted is legally taxable in India.

How do NRIs file for income tax returns

Determine Residential Status

As an NRI, you have to be sure of your residential status. Your residential status has to be determined concerning your financial year. However, this condition changes if you have shifted abroad in recent times and vice versa. The number of days of your stay in India is essential as well. An NRI is supposed to stay at least for a minimum of 182 days or more than that. Otherwise, an individual is considered a resident.

Calculate your taxable income

The second step to filing your income tax return is by calculating your taxable income. An individual needs to understand the meaning of total gross income. Total gross income refers to the total income before tax deductions. If your total gross exceeds Rs. 2.5 lakhs, then you will be required to pay your taxes in India necessarily. The income you receive could be from several sources. Nevertheless, NRIs can claim their benefits under tax treaties. NRIs also can claim refunds if tax deducted at source is from their income. To claim, these NRIs have to reconcile their TDS credit and advance the tax in Form 26AS.

However, to claim both these benefits, NRIs will have to file their returns compulsorily. The gross income, however, is not relevant here. NRIs can also declare deduction up to Rs. 1.5 lakhs in total. However, one cannot invest in specific instruments like the public provident fund. NRIs are also required to report their assets as India's liabilities if their income in India exceeds an overall Rs. 50 lakhs.

Assert double taxation treaty benefits

The double tax avoidance agreement (DTAA) is cited as a better way to understand filing income tax returns for NRIs. The DTAA allows an NRI to steer clear of paying their taxes twice on the same income. An income can be deducted from a tax deduction in a country or taxed even at lower rates in the NRI's home country. Therefore, if an NRI has paid their tax in India, he/she can then get a tax credit in their country of residence. The credit will be available on the tax paid within the same income.

Verify income tax returns

Once an individual has filed for their income tax returns, they will have to verify the returns within 120 days. Else, the filed tax returns will turn invalid.

These are the regulations for NRIs to file for their income tax returns.

In conclusion, NRIs are required to pay income tax on their earnings in India, including the income predicted to accrue within the country. Filing income tax returns involves determining residential status, calculating taxable income, claiming benefits under tax treaties, and verifying the returns within the specified timeframe. Compliance with these regulations is essential for NRIs to fulfill their tax obligations in India.

Take control of your income tax obligations as an NRI. Learn how to file your tax returns, determine your residential status, calculate taxable income, assert treaty benefits, and verify your returns. Stay compliant and maximize your tax benefits today. For more details contact us at info@manishanilgupta.com

Disclaimer:The information given above is to provide general guidance to the readers. This information should not be sought as a substitute for legal opinion