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Individuals

1.Employed  /  Salaried (No Content) – I HAVE GIVEN DOCUMENTS AND SAME IS THERE IN CLEAR TAX SITE

2. Non-Residents including Non-Resident Indians’s

AM I A NON-RESIDENT INDIVIDUAL?

The residential status of a person under the Indian tax laws is governed by section 6 of the Income Tax Act, 1961. For purposes of taxability of a person’s income, a person can be a Resident (R), Resident but Not-ordinarily Resident (RNOR) and Non-Resident (NR).

An Individual is considered as a 'non-resident' in a financial year on satisfaction of all of the conditions below:

  1. Has not stayed in India for 182 days or more during that financial year

AND

  1. Has stayed in India for less than 60 days during that financial year or for less than 365 days during the 4 years preceding that financial year.

Following picture will ease the understanding

Further,

In the case of an individual,—

 (a)  being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (b) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted ;

 (b)  being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (b) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted.

A PIO is a person who, or any of his parents, or any of his grandparents were born in undivided India.FEMA and various rules and regulations under FEMA, have different definitions of the term NRI.

WHICH INCOMES ARE TAXABLE FOR A NON-RESIDENT?

Income of any previous year of a person who is a non-resident includes all income from whatever source derived which

  1. is received in India in such year by or on behalf of such person ; or
  2. is deemed to be received in India in such year by or on behalf of such person[Specified under the Income tax act] ; or
  3. accrues or arises to him in India during such year; or
  4. is deemed to accrue or arise to him in India during such year[Specified under the Income tax act].

 

Few Examples are as follows:

  • Salary received in India or salary for service provided in India
  • income from a house property situated in India
  • capital gains on transfer of a capital asset situated in India
  • income from Fixed Deposits or interest on savings bank accounts

 

These taxable amounts could be reduced by using special provisions for eligible NR’s / NRI’s by claiming other benefits and deductions available for NR’s / NRI’s.

Deduction from House Property Income for NRIs

NRIs can claim all the deductions available to a Resident from Income from House Property for a house purchased in India. Similarly Deduction towards property tax paid and interest on home loan deduction is also allowed. Losses from such house properties can be set off against eligible income(s).

 

Deductions under Chapter VIA of the Income tac Act

Some of the deductions under section 80C are available– life insurance premium paid in India, ULIPs and ELSS purchased in India. Deduction under section 80D for health insurance premium payments for parents are also allowed to be claimed.

The taxability under the afore said provisions can further be reduced to nil / lower income for tax purposes by invoking Double Taxation Avoidance Agreements entered into by Government of India and Other countries.DTAA is Double Tax Avoidance Agreement between two countries to avoid taxation of same income in both the countries. There are two methods to claim tax relief - exemption method and tax credit method. By exemption method, NRIs are taxed in only one country and exempted in another. In tax credit method, where the income is taxed in both countries, tax relief can be claimed in the country of residence.

WHEN SHOULD NR’S / NRI’S FILE INCOME TAX RETURNS IN INDIA?

Income Tax Return must be filed by an NRI if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax before allowing deduction under Chapter VIA of the Income tax act.

Income Tax Return must be compulsorily filed in the following cases:

  • To claim deductions / exemptions which weren’t considered for making TDS by payer.
  • To get a tax refund.
  • To carry forward losses so they can be reducedin later years from taxable Income.
  • In case of short-term or long-term capital gains earned from sale of any investments or assets, even if the gains are less than the basic exemption limit.

As per Section 115G of the Income Tax Act 1961, the non-resident Indian need not file the Return of Income if:

  • Where the total income of the non resident Indian consists only of investment income and income by way of long term capital gain, and
  • The tax deductible at source has been deducted from such income.

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.

Dates for filing of Returns

July 31 after financial is the date to file income tax return in India for Individuals generally including NR’s and NRI’s.However,

- If there is no tax payable (that is all your tax has been deducted at source), belated tax return can still be filed by 31st March of the next year without any penalties

- If there is tax payable, still belated returns can be filed by 31st March of the next year with interest as applicable for every such delay starting from due date of filing of returns till the time you file your tax returns

- If you do not file your tax returns even by the 31st of March of the next year, you may be charged a penalty of Rs 5,000 for such belated filing of returns.