Filing Income Tax Return (ITR) for NRI
If an Indian Citizen/Person of Indian Origin stays in India for a temporary period or never stays at all, yet earns money from this country, the income is considered to be NRI income. Taxability of their income that accrues or arises in India or is earned from abroad is decided based on the staying time of these individuals in India. Like any other taxpayers of India, an NRI is also liable of tax payment if the gross total income exceeds INR 2.5 lakh and file ITR Return within time. There are other criteria that are involved in the taxation of NRI income as explained below.
Residential Status of NRI
Three broad divisions are made to classify an individual’s residential status in India for income tax calculation.
A. Resident:
Till FY 2020-21, Citizens/PIOs are called Indian ‘Resident’ when their staying time in India is:
- 60 days in a FY (Valid for Person of Indian Origin)
- More than 60 days but at most for 182 days for a FY and for 365 days in past four years before the current FY.
- 182 days (For those who stay abroad and make an income)
Note: In Budget 2020, some changes are made in staying time as:
- 120 days from 182 days for those having net income more than INR 15 lakh from India (other than any foreign income)
- Further, a ‘Resident’ citizen earning a net income more than INR 15 lakh in India is considered to be ‘Deemed Resident of India’ if he/she does not have a tax liability in any other country.
B. Resident not Ordinary Resident:
Till FY 2019-20, RNOR status was decided with either of these options:
- Being ‘Non-Resident’ for 9 out of 10 previous FYs preceding the current FY. On staying for 2 out of 10 years, the individual is classified under ‘Resident ordinarily Resident (ROR)’.
- Staying time is 729 days in total in 7 years before the current FY
In Budget 2020, some more conditions are added:
- The individual’s net income, other than income from foreign sources should be more than INR 15 lakh
- Staying time is 120 days or more (less than 182 days)
Such resident’s foreign income (income that arises/accrues outside India) is not to be taxable in India.
C. Non-Resident:
If the conditions of above two classifications are not fulfilled, the individual is treated as ‘Non-Resident’.
Taxable Income for NRI
Computation of Total Income of Mr.NRI
Income From Salary | XXX |
Income From House Property | XXX |
Income From PGBP | XXX |
Income From Other sources | XXX |
Income From Capital Gain | XXX |
Gross Total Income | XXXX |
Less: Deduction Under Chapter VIA | XXX |
Total Income | XXXX |
An individual, who is classified as ‘Resident’ is liable to pay tax on his/her global income. Else, if he/she is classified as ‘NRI’, he/she is liable to pay tax in India only for the income that accrues or arises in India. NRIs can earn taxable income in India from these sources:
- Income from Salary: Any salary for a service sought for India is taxable in India irrespective of where the NRI receives the income. This rule is applied for the Indian Nationals who are working abroad on a job that is controlled by Government of India or any Indian Organization.
- Income from House Property: Same conditions are applicable for NRIs as followed for the residents, including provision for standard deduction, benefits on home loans.
- Rental Payments to an NRI: It is subject to TDS payment @ 30%. A tenant should fill and submit Form 15CA as a part of NRI payment rule to the Tax Department, sometimes preceded with Form 15CB, that is Chartered Accountant’s Certificate. Form 15CB is not applicable if:
- Annual Rental Payment not more than INR 5 lakh.
- Lower TDS is deducted either attached with certificate u/s 197 or by the order of AO.
- The transaction falls under Rule 37BB of IT Act.
- Income from Other Sources: Such as, FD interests, Savings Account interests of any Indian Banks, etc.
- Income from Business and Profession
- Income from Capital Gains: Income from capital gains originated in India, such as, shares, securities, house property (subject to TDS @20% over selling price).
NRI Provisions on Special Investment Income
An NRI is allowed to earn income from the following Indian assets bought with foreign currency:
- Shares in a public/private company
- Debentures issued by a publicly-listed Indian company
- Deposits with banks and public companies
- Security of the Central Government
- Other Central Government assets for this purpose recorded in official gazette
Ordinarily, income from such investments is taxed @20%. If it is the only income of the NRI for the whole FY with TDS deduction done, the income from such investments is tax-free.
No indexation and deduction benefits are allowed u/s 80 over long term capital gain received from the sale/transfer of these assets.
Deductions and Exemptions for NRI
Allowed Deductions are:
A. Deductions u/s 80C: Maximum deduction up to INR 1.5 lakh is allowed over an NRI’s gross income. The investments on which the deduction can be claimed are:
- Life Insurance Premium Payment: Policies that are taken in the name of NRI/spouse/children (dependent/independent)
- Children’s Tuition fee Payment: Allowed for two children over the payment in any educational institute fee payment located in India
- Principal Repayment on Loan on House Property: Benefits of principal repayment u/s 80 is allowed along with claims of deduction based on stamp duty, registration charges
- Unit-linked Insurance Plan (ULIPS)
- Investment in ELSS
B. Deduction u/s 80D: NRIs (General age group/Senior Citizens) can claim deductions over Health Insurance of Premium Payments, of up to INR 25,000 (General Age Group) and INR 50,000 (Senior Citizen). They can claim the same benefits over the Insurance of their parents (General age group/Senior Citizens) of up to INR 25,000 (General Age Group parents) and INR 50,000 (Senior Citizen parents).
C. Deduction u/s 80E: NRIs can claim deductions on Education Loan for Higher Studies availed for spouse/children/for whom the NRI is guardian, with a tenure of 8 years or period of interest payment whichever is earlier. No deductions allowed on Principal Repayment.
D. Deduction u/s 80G: NRIs are allowed to claim deduction on donation for Social Cause.
E. Deduction u/s 80TTA: NRIs can claim deduction in against interest paid on Savings Bank Account of up to INR 10,000.
F. Exemption u/s 115F: Available for income from long term capital gains of Indian assets bought with foreign currency, when it is reinvested in certain recognized Indian institutions, such as, company shares, Government securities, Public Company debentures, etc.
G. Exemptions on Interest Income: It is tax-free for the interest earned on NRE Account and FCNR Account. Interest on NRO account is taxable.
H. Exemptions of Sale of Property (Long Term Capital Gains): NRIs can claim exemptions available u/s 54, 54 EC, 54F
Deductions Not Applicable for NRIs
NRIs are not eligible to take tax benefits in against of these investments:
- Investment in PPF
- Investments in NSCs
- Post Office 5-year Deposit Scheme
- Senior Citizen Savings Scheme
- Investment under Rajiv Gandhi Equity Savings Scheme (Section 80CCG)
- Deductions in against Medical Expenses, such as, Section 80DD, 80DDB (available only to Residents), 80U (available only to Residents)
How can NRIs Avoid Double Taxation?
To secure income from coming under Double Taxation, that is the situation when an NRI is taxed on the same income from his/her residing country and India, an NRI should get the relief of (Double Tax Avoidance Agreement) DTAA. NRI can opt any one of the two given relief options:
- Exemption Method: Where the NRI tax to be levied from any one of the countries
- Tax Credit Method: Where income tax is levied by both the countries, but tax credit is granted from NRI’s residence country
Frequently Asked Questions
- What is meant by Gross Total Income of NRI?
Answer: As per the provision of income source(s) allowed for NRIs, each taxable income earned during a FY is separately calculated making the deduction adjustments wherever required and then added together. This sum total of all income sources is called Gross Total Income of the NRI.
- What is the tax-free income amount available for NRIs?
Answer: Like other taxpayers of India, an NRI’s income up to INR 2.5 lakh is tax-free.
- Which ITR forms should an NRI file to declare income tax in India?
Answer: Depending on sources of income of the NRI in India, he/she has to select the ITR form as given below:
- ITR-2, General ITR form to be used by NRI to file Tax Return on Income based on salary, house property, capital gains, other sources, etc.
- ITR-3, if the income is from business/profession that accrues or arises in India. The same form is to be used, for the income under presumptive income scheme
Note: ITR-1 is only used by ‘Residents’ for filing their returns.
- Which information an NRI should declare in their ITR returns?
Answer:
- Is it mandatory for an NRI to have PAN card and Aadhaar Card for ITR processing?
Answer: As per Section 139AA of IT Act of India, NRIs are NOT required to quote Aadhaar Number.
Income tax filing deadline is right around the corner. If you haven’t filed yet, do it now for FREE on myitronline! Avoid last minute rush and file your tax return today on MYITRONLINE in 5 mins.( www.myitronline.com)
AIf you are looking for CA assistance to file your tax return, you can opt for MYITRONLINE CA assisted plan starting
https://www.myitronline.com/application/
If you have any questions with filing your tax return, please reply to this mail.
info@myitronline.com and call 9971055886.
Due date of all IT Return filings extended from July 31 to November 30
Due Date Tax audit from 30th September 2020 to 31st October 2020
Updated TCS Rate Chart For Financial Year 2020-2021 Assessment year 2021-2022
Updated TDS Rate Chart For Financial Year 2020-2021 Assessment year 2021-2022
Income Tax New Rate AY 2021-22 ( FY 2020-2021) (Section 115BAC)
CBDT has notified new Income Tax Return
Income Tax Old Rate AY 2021-22
A Comparison of Old and New Tax Regime Rates for AY 2021-22
ITR-4 (SUGAM) | The ITR form Now Available for E-Filing at Income Tax Portal
Linking Your Aadhaar with PAN for filing ITR and E-verification
Presumptive Taxation Scheme of Section 44AD, Section 44ADA, Section 44AE, for Business and Professions
Revised IT Return under Section 139(5) of Income Tax Act
Big relief for these small taxpayers holders provided 40th GST council meeting
Big relief for these GST small taxpayers holders provided Facility of filing Nil Form GSTR-3B through SMS
Cost Inflation Index (CII) | Meaning & Index from 2001-02 to 2020-21
New Annual Information System (AIS) to Replace Annual Tax Summary Statement Form 26AS
Comparison Of Old And New Tax Regime Rates For AY 2021-22
Filing of Income Tax Return A.Y. 2020-21,due date is extended till 30th November, 2020
Provisions of Online Correction in Form 26QB (TDS ON Sale of Property)
Weekly Update:- INCOME TAX, GST, Corporate & Allied Laws
Extended Last Date for Income Tax Returns for Financial Year 2018-19 ( assessment year 2019-20) from 31st March, 2020 to 30th June, 2020.
Taxability of Gifts Received by Individual or HUF Member u/s 56(2)x
Live interactive online classes (ALL INDIA BASIS) Concessional Price for 10+1 & 10+2 commerce all subject
Download your Aadhaar Card using your Mobile Number
Section 44AB New Amendments on 2020 and Their Impacts in Businesses
Income from House Property and Taxes
Institute of Chartered Accountant in India (ICAI) has launched Bulk UDIN for Certificates
HAVE YOU FILED YOUR RETURN FOR A.Y. 2019-20? IF NOT , 30 JUNE 2020* COULD BE YOUR LAST CHANCE.
Sanjeev Varshney Classes
Presents Live Virtual Classes on ALL-INDIA BASIS at a concessional price for CA & CMA Foundation commencing soon.
Filing Income Tax Return (ITR) for NRI
Filing Of Income Tax Return A.Y. 2019-20,Due Date Is Extended againTill 31th July, 2020
PAN-Aadhaar link date again extended Till 31th March, 2021
ITR-2 available on its e-Filing portal
relief by waiver of late fee for delay in furnishing outward statement in FORM GSTR-1 for tax periods for months from March, 2020 to June, 2020
CBIC to provide big relief for these GST Small Taxpayers Holders by lowering of interest rate for a prescribed time for tax periods from February, 2020 to July, 2020.
Sanjeev Varshney Classes Presents Live Virtual Classes On ALL-INDIA BASIS At A Concessional Price For CA and CMA Foundation New batches starting now!
Deduction 80EEA in respect of Interest paid on Loan Taken for Acquisition of Residential House Property (Affordable Housing)
GST DATES EXTENDED AGAIN TILL 30.09.2020 FOR ALL ASSESSEE Notification no 57/2020 30.06.2020
FILING FOR INCOME TAX RETURN A.Y 2020-21
Section 194 N Amendment in Finance Bill 2020 – TDS Rate Goes Up on Cash Withdrawal
Big Relief For These GST Small Taxpayers Holders Provided Facility OfFiling NIL Form GSTR-1 through SMS on GST Portal.
BIG BREAKING IMP ANNOUNCEMENT CA MAY 2020 EXAMS
ITR-2 Excel utility Available On Its E-Filing Portal
Relief to small and middle class taxpayers, the date for payment of self-assessment tax u/s 234A of INR 1 Lakh Tax Liability Limit
CBDT Notification No. 35/2020 Revised Income Tax Due Dates, Interest on Delayed Payment
Who all are required to file return of income under newly inserted 7th Proviso to Section 139(1) of IT Act, 1961.
CBDT issues press release on 'Verification of applicability u/s 194N' functionality in e-filing portal.
One-time relaxation for Verification of tax-returns for the Assessment years 2015-16 to 2019-20 which are pending due to non-filing of ITRV form and processing of such returns
My friend Sanjeev Varshney starting some new batches for CA & CMA Foundation students in this month of July 2020.
e-Filing Helpdesk is temporarily impacted due to imposition of lockdown from 14-22 July
Important Announcement November 2020 CA Examinations
Exclusive COVID-19 UNLOCKDOWN Offer, Join Online Self-Learning GST Course at up to 90% discount
Filing Of Income Tax Return A.Y. 2019-20,Due Date is Extended AgainTill 30 September, 2020
ITR-3 Excel Utility Available On Its E-Filing Portal
GST Alert: July 2017 data removed from GST Portal:
Amendments in the E assessment Scheme 2019 published vide notification of the Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes
Best Judgment Assessment Income Tax Notice U/s 144
Make your instant e-PAN card absolutely free within ONLY 3 minutes
All Statutory Compliance Calendar for September 2020
GSTR – 2B: Auto Drafted ITC Statement Launched from July 2020
5-year wait for gratuity is over, big gift to employed people.
Income tax Return Filing Due Dates FY 2019-20, AY 2020-21
A big Relief given by Ministry of Corporate Affairs extending the timeline for holding Annual General Meeting till December 31st from September 30th.
Prime Minister Narendra Modi gave three gifts to the taxpayers -Faceless Assessment, Faceless Appeal and Taxpayers Charter.
Only 3 days left, the central government has implemented the 'One Nation-One Ration Card' scheme,
Final Opportunity ITR E-Verification Even after filing ITR, it is very important to do this job
The Ministry of Corporate Affairs has extended the duration of several schemes till 31.12.2020
CBDT has notified Belated and Revised Income Tax return deadlines extended again 30 September, 2020 to 30 November, 2020.
The Income Tax Department has issued new guidelines regarding tax collection at source TCS.
Statutory Compliance Calendar for October 2020
Recommendations of the 42nd GST Council Meeting held today
DONATIONS MADE THE PM CARES TO FUND SHALL BE ELIGIBLE FOR THE FOLLOWING BENEFITS
7th pay commission news for LTA
ICAI November CA Inter & Final Exams postponed
Difference of Assessment year and Financial year
Good news for EPF account holders PF related complaint will be cleared on WhatsApp message,
Special Window to States for meeting the GST Compensation Cess shortfall
Extension of due date of furnishing of Income Tax Returns and Audit Reports
Extension of due dates for Annual Return and Reconciliation Statement for 2018-19
After the death of the taxpayer, his heir has to submit his income tax return.
Buy 100% Pure Silver/Gold Coins & Notes
Class 2 DSC’s issuance will be withdrawn/ stop from 1st January 2021
Statutory Compliance Calendar for December 2020
All Valid GST registration will be physical verification
Income tax return 2019-20 filing: last date, list of documents required for filing income tax return
CBDT Has Notified Income Tax Return Deadlines Extended Again
New Income Tax Return filing due dates for FY 2019-20, AY 2020-2021
Union Budget 2021-22
Budget 2021-2022
Now get PAN card made at home
e-Campaign - High Value Transactions for AY 2019-20
Public Provident Fund i.e. PPF is considered a better option for long term investment
Govt extends timelines of certain compliances, to mitigate the difficulties faced by taxpayers due to the ongoing COVID-19 pandemic.
Old And New Tax Regime Rates For AY 2022-23
Income Tax Return Deadlines:
Extension of time limits of certain compliance to provide relief to taxpayers
Launch of new e-filing Portal of the Income Tax Department
Recommendations of 43rd GST Council meeting
Statutory Compliance month for June 2021
New, taxpayer friendly e-filing portal of IT Department to be launched on 7th June, 2021
Issues on New Income tax e-filing 2.0 Portal
Finance ministry to hold meeting on 22nd June 2021 with Infosys on issues in the new income tax Portal
Cost inflation index for Financial Year 2021-22
100% growth in Net Direct Tax collections for the Financial Year 2021-22
Extension of Timelines
Economic Relief Measures announced for various sectors Total: Rs 6,28,993 crore
Relaxation in electronic filing of forms 15CA & 15CB
Finance Ministry meeting with infosys on glitches in e-filing portal of income tax department - resolved till 15 september 2021
CBDT Has Notified Income Tax Return Deadlines Extended Again
Ram Nath Kovind (President of India) Speaking
Union Budget 2022-23 INCOME TAX UPDATES
filing updated income tax returns proposed in Budget 2022
Crypto Taxation Guide Budget 2022
last date of filing ITR| Last date| Details on new forms and complete checklist
Free Company Search Company Name Check, MCA Search - Myitronline
Income Tax Rules Change- Income Tax has made 3 major changes, you must know…
New record for Income Tax Department as over 5.83 crore lakh IT Retuns filed on till 31st July, 2022.
What is ITR? Which ITR should you File? Types of ITR, How to file ITR? Income Tax Returns e-filing – ITR forms for FY 2021-22, AY 2022-23
compliance calendar for september 2022
GST slab rates in India
All you need to know about the salary slip
Is pension Taxable?
What is a GST audit?
form gstr 3b filing
compliance-calendar-october-2022
Tax Compliance and Statutory due dates for November 2022
statutory due-date calendar December 2022
Top 5 Mistakes You Must Avoid In Your Tax Planning
6 Robust Reasons to not to miss NPS in your tax planning
18% GST on Term & Health Insurance is too heightened! Know more
File Belated income tax return By the 31st of December 2022 Considering the notice & Penalties
Statutory & Compliance Calendar For January 2023
Guide to Standard on Auditing (SA) 230, Audit Documentation
The online gaming industry attracts 28% GST on gross gaming revenue, not on the entry amount
Union Budget 2023
Budget 2023 Updates: A glimpse of New income tax slabs 2023-24 - Myitronline
Budget 2023 - Impact On Market Infra, Tech & Others - Myitronline
Things To Do After Filing Your Income Tax Returns
Budget 2023 - 5 Major Announcements Proposed In Union Budget 2023
Union Budget 2023: PM Narendra Modi Praised The budget Of “Amrit Kaal
Filing ITR - Things to Keep In Mind While Filing ITR
Common ITR Form - 5 Ways In Which Common ITR Will Benefit Taxpayers
5 Things Taxpayers must follow while filing ITR
Everything About Property Tax You Must Know
CBDT : “Sign of economic Revival” Net direct tax collection in FY 2022-23 increase 23%
Analysis of New Disclosures in GSTR-3B
income tax returns but have not yet received the refund
Check your Income Tax Refund
5 Best Tax-Saving Investments That Everyone Must Know
The Audit & Its Importance
Income Tax Through An e-pay Tax Option
Penalties & Late fees After missing the audit report
Pay slip
Solvency Certificate
All About One Person Company
Section 24 of the Income Tax Act- Things You Must Know
TDS Rate Chart
CBDT notifies ITR Forms For AY 2023-24) In Advance
How can NRIs prevent double taxation under DTAA?
Statutory & Compliance Calender For March 2023
CBDT To Take Legal Action Against 33000 ITR Mismatched Cases
Tax Saving Tips in 2023
AIS app for Taxpayers
PAN Aadhar linking Deadline Extended
Statutory & Compliance Calender For April 2023
Analysis 8 GST Notifications Issued 31st march 2023