Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 How can Form 15G & Form 15H save TDS on interest income?
 How are e-filing and e-payment of taxes different? Know details here
 Income Tax return (ITR) filing 2024: What is Form 16, when is issue date and why is it crucial? Explained
 Step-by-Step Guide To File Income Tax Return FY 2023-24
 Income-tax filing: Should you file your returns in April or wait until July 31?
 ITR Filing: 6 Ways to Get Exemption on Income Tax
 Income Tax Return Filing: 10 Mistakes To Avoid When Filing ITR For AY 2024-25
 Old vs New Tax Regime: Who should move to the New Tax Regime from the old one?
 Income Tax Calculator FY 2023-24: How To Know Your Tax Liability Online On IT Dept's Portal?
 BackBack Income Tax Act amendment on cards on tax treatment of MSME dues
 ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing. Check details here

The quick and simple tax filing guide for NRIs - FY19
May, 01st 2019

Even if an NRI does work in India, the payment they receive will be taxable in India. And, if an NRI worked abroad but received his salary in India, the amount will be added to their taxable income in India.

Tax filing season is here and everyone is getting ready with their documents and financial details for the same. However, there is one question that looms in every NRI's head whenever tax season is nearby, 'Do I need to file taxes in India as well?’ Unlike regular citizens of India, the rules and regulations for NRIs vary to a certain extent. There are additional clauses and legalities involved that could get a little confusing for some to understand.

To remove your worries, we've gone ahead and taken the time to put together a quick but useful guide to filing taxes for NRIs in India. But before that let’s understand what NRIs are taxed on.

As an NRI, you only pay taxes on income that is generated in India. This means that if you have made any money, either through investments or as receipts, in India, you will be liable to pay taxes on that amount. A few examples include:

Keep in mind though, that even if an NRI does work in India, the payment they receive will be taxable in India. And, if an NRI worked abroad but received his salary in India, the amount will be added to their taxable income in India.

Now that we know what NRIs need to pay taxes for, let's get down to the nitty-gritty of the same.

Your Tax Residency Status - The first thing you need to do is determine your tax residency status as an NRI. This essentially tells you whether you fall into the category of resident or non-resident as an Indian taxpayer. For individuals residing outside India for a considerable amount of time, this becomes fairly straightforward to ascertain. However, the confusion arises in the case of individuals who have recently moved out of the country, or in case of people who have returned to the country after staying abroad for a long time.

Your tax residency status is decided by counting the number of days you were physically residing in India during the financial year. In order for you to fall in the non-resident category, you should have stayed in India for no longer than 182 days in the last financial year (2018-19), or you should have been in the country for less than 60 days in a year or 365 days over the course of the last 4 years. Whenever you calculate this number, keep in mind that your arrival and departure dates will be included as a part of your stay in India.

Your Gross Total Income - This is total income as it stands before any tax deductions are made. If your gross total income exceeds Rs 2.5 lakh, you are liable to pay taxes as an NRI in India. This income will include the gain on the sale of equity shares on the stock exchange. Filing taxes for NRIs is mandatory in India if you want to claim benefit under a tax treaty, irrespective of the value of your gross total income. For NRIs, filing their taxes for the financial year 2018-19, your Indian tax filing will include only the income accrued and received in India, including all interest received from channels like fixed deposits.

DTAA Advantages - As an NRI, you get the opportunity to earn tax credits for tax paid in India against your tax liability in your country of residence or vice versa. Under the double taxation avoidance scheme (DTAA) signed by India with 90 countries, you can claim these credits while filing taxes in your country of residence by following a few simple steps.

If you have any income that is taxable in India, you need to provide a few documents like a tax residency certificate issued by your country of residence, and a self-declaration in the prescribed format to the entity responsible for deducting tax at source.

Things To Remember - For the financial year 2018-2019, here are the things that NRIs filing taxes in India have to remember:

1. The last date for filing taxes is 31st July 2019.
2. Foreign Currency Non-Repatriable (FCNR) accounts and Non-Resident External (NRE) Rupee accounts are not eligible for receiving tax refunds. Only Non-Resident Ordinary (NRO) Rupee accounts can be used to receive tax refunds.
3. Do not forget to check if you are eligible for DTAA benefits, they can be of great help when it comes to filing taxes in your country of residence.
4. In some countries, you would have to declare your Indian income while filing taxes in the country you reside in. You have to do this even if you have already filed your Indian taxes. Check the local rules and regulations if you haven’t done so already.
5. If tax is deducted at source from your investments (TDS), and you are eligible for a tax return, you will need to file taxes in India in order to claim them irrespective of your Gross Income.
6. If your tax liability in a financial year exceeds Rs 10,000, and you have not filed advance tax, you will be liable to pay interest under section 234B and section 234C. For the next financial year, consider filing advance tax on or before 15th June, 15th Sept, 15th Dec and 15th March.

Follow these tips and filing taxes in India as an NRI will become considerably easier than before. In case you’re having trouble getting your head around all the technicalities, consider getting in touch with a certified financial planner or tax planning firm who can help you file your taxes and may even find ways to help you reduce your tax liability.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting