The NRIs have to file an income tax return when the taxable income of the NRIs are below the basic exemption limit(Rs 250,000), but if the exempted income is more than the basic exemption limit (i.e. Rs 250,000), then also NRIs are required to file the return of income.
Until last year, up to FY 2015-16, a taxpayer (individual or HUF) was required to file his return of income if his total income without considering the deduction under Chapter VI-A exceeds the basic exemption limit. For instance, if an NRI has only exempt long-term capital gains income of Rs 575,000 and has no other income, he shall still be required to file his return of income as the long-term capital gains (without considering the exemption) exceeds Rs 250,000.
Example: Raj Sharma lives in the USA. He checked his Form 26AS online and found out that a TDS entry of Rs30,000 is mentioned. This TDS had been deducted at 30% on interest earned by him in his NRO account. Raj has no other income in India. His total income in India is less than the minimum exempt amount, and therefore he does not have to pay any tax on it. Since no tax is payable by him, he must claim a refund of the TDS deducted on his interest income.
An NRI is not required to file an income tax return in India while having income in India, only if:
Total income in the previous year consisted only of investment income or income by way of long-term capital gains or both and tax has been deducted from such income at source.
The Investment Income means any income derived (other than dividends referred to in section 115 O) from a foreign exchange asset. Foreign Exchange Asset means” any specified asset which the assessee has acquired or purchased with, or subscribed in convertible foreign exchange. Similarly, section 115C(e), defines, Long-term Capital gains, which means income chargeable under the head capital gains relating to the capital asset, being a foreign exchange asset which is not a short-term capital asset.
Due Date of NRI’s Income Return Filing
NRI Income tax return must be filed on or before 31st July following the financial year by an individual, the due date being September 30 if the NRI is a working partner of a firm whose accounts are necessary to be audited. If one has missed the due date, he/she can file a belated return. When it comes to businesses, the
haccp training, haccp course is necessary to better the process.
Time limit for filing a belated return reduced by 1 year – Effective FY 2016-17 (The assessment year 2017-18), a belated return can be filed till the end of the relevant assessment year. Thus, time available for filing a belated income tax return for the assessment year 2017-18, would be up to 31-3-2018 and not 31.03.2019.
Procedure for Filing NRI Income Tax Return
NRIs can easily file their income tax return online. In addition to e-filing, they can also file through the following methods:
- Furnishing the return in a paper form;
- Furnishing the return electronically using digital signature (DSC);
- Transmitting the income tax data in the return electronically under electronic verification code;
- Transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;
- The assesse should print out two copies of Form ITR-V. One copy of ITR-V, duly signed by the assessee, has to be sent by post. The other copy may be retained by the assesse for his/her records.
Why ITR should be filed by NRI?
- If the Tax deducted at source is more than the actual tax liability of the NRI, then refund can be claimed by the NRI only after filling return along with interest.
- If the NRI has incurred any loss on sale on sale of investments (either short term or long term), then NRI can set-off such losses from the Income in future years only if he has filed the income tax return.
- Having details of the documentation of all the Income and Assets in India and in Foreign Country will help the NRI in complying with the Repatriation Rules for Income and Assets held in India and also when the NRI returns to India.
