Tax on income of NRI in India
Q:When will the Non Resident Indian be required to file the income Tax return in India?
In the Following cases an NRIs income would be considered as ‘earned’ in India and included in the tax return in India.
* You have accounts or deposits in India. Any returns in the form of interest in these accounts is income earned in India.
* You moved abroad during the financial year 2014-15 and you are an NRI for purposes of income tax for financial year 2014-15. Prior to your move, you spent a few months in India and earned salary in India, your employer has provided you a Form 16 and all taxes are duly deducted by your employer. If your gross income from this employer and including all your other incomes in India for the entire financial year exceed Rs 2,50,000, you must file a return in India. If your gross income does not exceed Rs 2,50,000, you should still file a return to claim refund of TDS deducted.
* You have a house property in India which you rented out for an annual rent of Rs 3,00,000. That is your only income from India. As per rules of taxation for house property, you can deduct 30% of the rent allowed as standard deduction and also property taxes paid by you, if the resulting amount is less than Rs 2,50,000, you may not have to file a return in India. Usually, tenants deduct TDS on rent before making a payment to NRIs, and therefore if TDS was deducted on your rental income, you can file a return to seek refund.
* You own two or more than two house properties in India, though none of these is let out. There is no rental income. In such a case as per the income tax act only one house property shall be considered to be self-occupied and its income shall be considered nil and all others will be considered deemed to be let out properties and therefore you will have income from house property and you will be required to file a return in India, if your income exceeds Rs 2,50,000.
You have deposits in India and bank deducted TDS from your deposits. While your total Income in India is less than Rs 2,50,000, file a return in India to claim refund for the excess tax deducted. Do note that NRIs cannot submit Form 15G and Form 15H to prevent deduction of TDS.
* You have been settled abroad and you decide to sell your only house property in India which was given to you by your parents, any capital gain on this house property is liable to be taxed and therefore a return must be filed by you.
The due date to file income tax return for NRIs and Residents individuals is August 31, 2015 for income earned in the financial year 2014-15. If there is tax payable in your return, you may have to pay penal interest, so do calculate your taxes and file your returns timely.
When Return of Income of NRI is not required to be filed in India
* You decide to buy a car for your parents who reside in India, no return of income is required to be filed by you, and there is no tax liability for you upon gifts to your parents.