INCOME TAX FILING FOR NRIS IN INDIA

Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), Persons of Indian Origin Residing Abroad (PIOs), and Foreign Citizens Residing in India (Expatriates) are consistently concerned about complying with laws and regulations, with Income Tax Return (ITR) being a crucial aspect of this compliance.

Key Points for NRIs, OCIs, and Expats:

1. Residential Status:

• Determining residential status is vital for Indian ITR.
• Categorized as Non-Resident (NR), Resident & Ordinary Resident (ROR), or Not Ordinary Resident (NOR) based on the number of days spent in India during the year.

2. Previous Year and Assessment Year:

• ITR in India is filed in the Assessment Year (AY) for the Previous Year (PY).
• PY is equivalent to a Financial Year, e.g., for FY 2018-19, the PY is April 1, 2018, to March 31, 2019, and the AY is 2019-20.

3. Taxability:

• Taxability is determined based on residential status.
• Non-Residents or NORs are not liable for tax on foreign income, while RORs are liable for tax on global income in India.

4. Double Taxation Avoidance Agreement (DTAA):

• DTAA is crucial for cases where a person is a tax resident in both India and their home country.
• Provides relief and outlines provisions for tax determination, rates, and information exchange between the tax authorities of two countries.

5. Due Date:

• The due date for filing Indian ITR is July 31 of the Assessment Year.
• Certain business entities have a due date of September 30 of the Assessment Year.

6. Components of Income:

• Income is categorized into five types: Salary, House Property, Business or Profession, Capital Gains, and Other Sources.

7. Deductions, Exemptions, Reliefs:

• NRIs, OCIs, Expats, and PIOs can claim various deductions, exemptions, and reliefs in their ITR to save taxes.

8. NRIs Taxability In India:

• NRIs/OCIs are generally liable for income related to House Property, Interest from NRO Bank Accounts, Gains from Mutual Funds or Shares in the Indian Stock Market, Gains on the Sale of Immovable Property in India, and Salary/Business Income during the year of migration.

9. Benefits of Filing Indian ITR:

• Claim a refund of TDS deducted in India.
• Report residential status and financial transactions or income in India during a PY.
• Use ITR copy as a legal/government document for various purposes.
• Maintain a track record with the Income Tax Department in India.
• Carry forward losses (e.g., loss on property sale) and avoid Income Tax Enquiries and penalties for non-filing or late filing of ITR.