The labyrinth of taxation laws can be overwhelming, especially when it comes to filing ITR for Non-Resident Indians (NRIs). When filing the ITR, it is important for NRIs to keep some points in consideration such as the residential status, global versus their Indian income, the tax filing threshold, and the exempt income. The ITR deadline for FY 2023-24 is July 31, 2024.
So, here is a step by step guide for NRIs and tax filing:
1. Importance of residential status
As per the Income Tax Act, 1961, the are some criteria to consider an individual as the resident of India such as his/her presence in India for 182 days more during the financial year, or the person was in the country for 365 days or more in the preceding 4 years, then that individual will be qualified as a resident of India.
Moreover, there are also special rules applied for Indian citizens working abroad and Persons of Indian Origin (PIO). For these individuals, the 182 says rule is the only criteria if their total income, excluding the foreign sources , is Rs 15 lakh or less.
2. Form 26AS: Match the TDS and the tax credits with Form 26AS
3. While filing the ITR, include all the Indian income sources such as interest, rental income, and capital gains.
4. Make sure to apply to the correct income slab rates.
ITR filing | Image Source: Wikipedia (Representative)
5. Choose the correct ITR form. In most cases, NRIs use ITR 2 but if you have a business income, use ITR 3.
5. Use the Double Taxation Avoidance Agreement (DTAA), to avoid paying taxes on the same income on both India and the another country.
6. Provide the bank account details properly. In the case of claiming refund and don't have an Indian account, provide the overseas bank account details.
7. If the total income exceeds Rs 50 lakh, declare assets and the liabilities in India and include both the immovable and movable assets.
8. Verify the ITR within 120 days of filing and can be done online or by sending a signed ITR-V to the Income Tax CPC in Bengaluru.
