5 Things to Know About NRI Tax Filing

A large number of NRIs have income sources in India. It can be in the form of salary, capital gains, income from house property, or interest earned from a savings bank account or fixed deposits. If the income earned from these sources is more than the basic income tax exemption limit applicable in India, the NRI should then also file tax returns.If your residential status has recently changed to NRI and you have income sources in India, here are five important things you should know about filing tax returns-

While every NRI earning any kind of income from India should file tax returns every year, it becomes essential in three specific cases. They are-

• If your annual income from India is above the basic exemption limit of Rs. 2.5 lakhs in the year
• If the TDS on salary, returns, interest income, etc. is higher than what was actually payable
• If you want to settle claims for an amount that you have set off as capital losses

The mandatory document includes a copy of your passport to help the IT department ascertain your residential status as an NRI.Additional documents that you might need are as follows-

• Form 16
• Form 26AS
• Bank account statement (NRE/NRO/Savings)
• Other income-related documents as requested by the IT department

Yes, just like resident Indians, there are many exemptions and deductions available for NRIs too. For instance, an annual income of up to Rs. 2.5 lakhs is exempted from income tax for NRIs.Similarly, NRIs can also take advantage of other deductions, like through the investment options available under Section 80C, to further reduce their tax liabilities.

An NRI might have paid more taxes than he/she was actually supposed to. This mostly happens with regards to TDS. In such cases, the IT department will refund your excess amount.File your tax returns before the deadline, and the IT department will refund the excess tax amount as per the pre-defined timeline. The excess amount will be directly deposited into your bank account.

If you have all the required documents and details, it should not take a lot of time for NRI tax filing . But if you still want a simpler alternative, you can hire a tax advisor or look for a reputed online tax filing portal so that they can complete the filing process on your behalf.

If you are an NRI with any kind of income source in India, it’d be wise to file your tax returns every year even if the annual income is below the exemption limit. This is especially true for NRIs who’d like to return to India permanently in the future.In case if this is the first time that you’d be filing tax returns as an NRI, you can consult a tax professional to avoid making any mistakes.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.